|
After
three months of increasing consumer confidence, December saw a
retreat of sorts, with the IBD/TIPP Economic Optimism Index falling
from 55.7 to 53.5 – a 2.2 point, or 3.9% drop.
However, despite the drop, overall confidence in
the economy still remains within positive territory.
- The Six-Month Economic Outlook, a measure of how consumers
feel about the economy’s prospects in the next six months,
fell 6.9 points, or 13.2%, to reach 45.4.
- The Personal Financial Outlook, a measure of how Americans
feel about their own finances in the next six months, lost 0.6
points, or 1%, reaching 61.1.
- Confidence in Federal Economic Policies, a proprietary IBD/TIPP
measure of views on how government economic policies are working,
gained 0.7 points, or 1.3%, to reach 53.9.
“With the elections now over for more than a month, the
initial jubilation of Democrats over their taking control of Congress
seems to be waning,” says Raghavan Mayur, president of TIPP,
a unit of TechnoMetrica Market Intelligence, IBD’s polling
partner. “Despite this, economic confidence continues to
be in the positive zone.”
|
According
to Mayur, a drop in the index is to be expected: “December’s
frigid start has consumers thinking about paying for higher heating
bills and the need to spend on Holiday gifts,” he says.
“But the economy as a whole is still very solid.”
The Breakdown
This month, 20 of the 21 demographic groups that IBD/TIPP
tracks were above 50 on the Economic Optimism Index compared with
21 groups in November.
Overall economic optimism increased in 4 of the 21 groups that
IBD/TIPP tracks and fell among 15; 2 groups remained unchanged.
Increases were moderate among the 4 advancing groups: 3.3 points
among 18 to 24 year olds, 0.8 among blacks/Hispanics and Midwesterners
(respectively) and 0.2 among those with household incomes between
$50K and $75K.
The highest index scores came from 18 to 24 year olds (62.8)
and Republicans (61.7).
With a score of 49.8, Democrats were the only group with a pessimistic
view of the economy (that is, with an index score below 50), although
that pessimism was only slight and very close to being neutral
in character.
|
