LOS ANGELES (June 8, 2010) — The IBD/TIPP Economic Optimism Index decreased 2.5 points, or 5.1%, in June posting 46.2 vs. 48.7 in May. This month's reading puts the index 1.9 points below its 12-month average of 48.1 and 1.8 points above its reading of 44.4 in December 2007 when the economy entered into the recession, and 4.7 points below its all-time average of 50.9.
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 912 adults from May 31 to June 5. The margin of error is +/-3.3 percentage points.
The IBD/TIPP Economic Optimism Index has three key components, all of which declined in June.
• The Six-Month Economic Outlook, a measure of how consumers feel about the economy's prospects in the next six months, fell 5.0 points, or 9.8%, to 46.0. When compared to December 2007, the index shows a gain of 13.9 points.
• The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, declined 0.5 points, or 0.9%, to reach 52.2.
• Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, decreased 2.1 points, or 4.9%, to reach 40.4.
"The persisting job situation is not helping confidence. Fully 52% of households are job sensitive, with 28% of households having at least one member seeking full-time employment and 41% of households concerned that a member may be laid off in the next twelve months," said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD's polling partner.
This month, four 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 (60.6), Democrats (60.3), and Black/Hispanic Americans (59.7).
Nineteen groups declined on the index, while two groups advanced.
On the Economic Outlook component, four of the groups IBD/TIPP tracks scored in optimistic territory. All 21 groups declined on the index. The highest index scores were for 18 to 24 year olds (62.3), Democrats (60.9), and Black/Hispanic Americans (58).
On the Personal Financial component, 14 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, two of the 21 demographic groups tracked were above 50. Six groups advanced on the index, while fifteen 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
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