2008 record      

 

economy_2LOS ANGELES (May 11, 2010) — The IBD/TIPP Economic Optimism Index increased 0.3 points, or 0.6%, in May posting 48.7 vs. 48.4 in April. This month's reading puts the index 0.2 points above its 12-month average of 48.5 and 4.3 points above its reading of 44.4 in December 2007 when the economy entered into the recession, and 2.3 points below its all-time average of 51.0. Note: Index readings above 50 indicate optimism; below 50 indicate pessimism.

The IBD/TIPP Economic Optimism Index has a good track record of foreshadowing the confidence indicators put out later each month by the University of Michigan and The Conference Board. IBD/TIPP conducted the national poll of 924 adults from April 30 to May 6. The margin of error is +/-3.3 percentage points.

The IBD/TIPP Economic Optimism Index has three key components, two of which declined in May.

• The Six-Month Economic Outlook, a measure of how consumers feel about the economy's prospects in the next six months, fell 0.9 points, or 1.7%, to 51.0. When compared to December 2007, the index shows a gain of 18.9 points.

• The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, declined 0.3 points, or 0.6%, to reach 52.7.

• Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, increased 2.1 points, or 5.2%, to reach 42.5.

"Economic confidence sustained its April gains and built a nominal amount over it in May. This despite bad economic news from overseas and stock market gyrations" said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD's polling partner.

"Despite market volatility, many investors and average Americans view the gain of 573,000 new nonfarm jobs since the start of the year as a sign of a bottom in the labor market," said Terry Jones, associate editor of Investor's Business Daily. "This, along with earlier gains in the stock market, seems to be underpinning consumer confidence right now."

The Breakdown

This month, six of the 21 demographic groups that IBD/TIPP tracks were above 50 on the Economic Optimism Index. The highest index scores were for 18 to 24 year olds (64.7), Democrats (64.6), and Black/Hispanic Americans (63.8).

Eleven groups improved on the index, while ten groups declined.

On the Economic Outlook component, fourteen of the groups IBD/TIPP tracks scored in optimistic territory. Seven groups advanced on the index, while fourteen declined. The highest index scores were for Democrats (70.0), 18 to 24 year olds (67.5), and Black/Hispanic Americans (65.6).

On the Personal Financial component, 16 of the groups IBD/TIPP tracks scored in optimistic territory. Ten groups advanced on the index while eleven groups declined.

On the Federal Policies component, four of the 21 demographic groups tracked were above 50. Fourteen groups advanced on the index, while seven groups declined.

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ABOUT THE IBD/TIPP POLL
The IBD/TIPP Economic Optimism Index is the earliest take on consumer confidence each month and predicts with 80% reliability monthly changes in sentiment in well-known polls by The Conference Board and the University of Michigan. The IBD/TIPP Economic Optimism Index is based on a survey of 900-plus adults chosen at random nationwide. The poll is generally conducted in the first week of the month.

An analysis of Final Certified Results of Election 04 and Election 08 show that TIPP was the most accurate pollster of both campaign seasons. For more information, go to www.tipponline.com

ABOUT INVESTOR'S BUSINESS DAILY (IBD)
Investor's Business Daily is a leading financial news and research organization recognized for proprietary stock screens, comparative performance ratings and a record of identifying stock leaders as they emerge. IBD's companion website, Investors.com, offers stock tools and research for investors of every level. These include the IBD Learning Center, intraday reports on market action and the IBD StockCheckup®. IBD hosts popular investment workshops and provides Home Study programs based on The CAN SLIM® Investing System. The newspaper was founded April 9, 1984 by William J. O'Neil, who originated the investing system that has outperformed major market indexes* for years.

*The American Association of Individual Investors' independent "real time" study found IBD's CAN SLIM investing achieved a 1519.8% gain vs. 54.9% for the S&P 500 the past nine-and-one-half years (1998 through June 2007, AAII Stock Screen).

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