LOS ANGELES (July 13, 2010) — The IBD/TIPP Economic Optimism Index decreased 1.5 points, or 3.2%, in July posting 44.7 vs. 46.2 in June. This month's reading puts the index 3.2 points below its 12-month average of 47.9 and 0.3 points above its reading of 44.4 in December 2007 when the economy entered into the recession, and 6.2 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 852 adults from July 6 to July 11. The margin of error is +/-3.3 percentage points.
The IBD/TIPP Economic Optimism Index has three key components, two 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 3.2 points, or 7.0%, to 42.8. When compared to December 2007, the index shows a gain of 10.7 points.
- The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, declined 1.3 points, or 2.5%, to reach 50.9.
- Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, gained 0.1 points, or 0.2%, to reach 40.5.
"Consumer confidence is sliding because of the persisting job situation. Fully 29% of households say that at least one member seeking full-time employment." said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD's polling partner.
"Many Americans remain troubled at the failure of the economy to respond to more than $2 trillion in various stimulus, bailout and Fed programs," said Terry Jones, associate editor of Investor's Business Daily. "They keep looking for clear signs of a strong rebound, but just aren't seeing it."
This month, three of the 21 demographic groups that IBD/TIPP tracks were above 50 on the Economic Optimism Index. The highest index scores were for Democrats (59.4), 18 to 24 year olds (59.3), and Black/Hispanic Americans (57.8).
Nineteen groups declined on the index, while two groups advanced.
On the Economic Outlook component, three of the groups IBD/TIPP tracks scored in optimistic territory. All but one group declined on the index. The highest index scores were for 18 to 24 year olds (59.4), Democrats (58.4), and Black/Hispanic Americans (56.7).
On the Personal Financial component, 13 of the groups IBD/TIPP tracks scored in optimistic territory. Six groups advanced on the index while fifteen groups declined.
On the Federal Policies component, three of the 21 demographic groups tracked were above 50. Ten groups advanced on the index, while eleven 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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