LOS ANGELES (November 9, 2010) — The IBD/TIPP Economic Optimism Index increased 0.3 points, or 0.6%, in November posting 46.7 vs. 46.4 in October.  The index is 0.2 points above its 12-month average of 46.5 and 2.3 points above its reading of 44.4 in December 2007 when the economy entered into the recession, and 4.0 points below its all-time average of 50.7.

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 November 1 to November 6. The margin of error is +/-3.3 percentage points.  

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

  • The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, improved 0.4 points, or 0.8%, to 50.0.  When compared to December 2007, the index shows a gain of 17.9 points.
  • The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, declined 1.2 points, or 2.3%, to reach 51.9.                                                                                                                 
  • Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, improved 1.8 points, or 4.9%, to reach 38.3.                     

"Consumer confidence is sustaining its October gains. The recent gains in the stock market, the Fed’s aggressive monetary policy, 150,000 new jobs in October, Republicans’ vow to cut spending are all helping to sustain confidence," said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD's polling partner.

 “Sentiment seemed to firm as it became obvious that control of Congress would shift,” said Terry Jones, associate editor of Investor’s Business Daily. “The mid-term congressional election delivered a clear rebuke to the big government policies that have been pursued for the last two years. This may be the hope and change American consumers have been waiting for.”

 The Breakdown

This month, only three of the 21 demographic groups that IBD/TIPP tracks were above 50 on the Economic Optimism Index. The highest index scores were for Black/Hispanic Americans (60.3) and Democrats (58.4).  The reading for Republicans was 39.0 and Independents was 41.2.  Republicans showed a gain of 3.7 points and Independents dropped 1.4 points.

 Twelve groups advanced on the index, nine groups declined.

 On the Economic Outlook component, ten of the groups IBD/TIPP tracks scored in optimistic territory.  The highest index scores were for Democrats (56.6), and Black/Hispanic Americans (55.2).

 On the Personal Financial component, fourteen of the groups IBD/TIPP tracks scored in optimistic territory. Nine groups advanced on the index while twelve groups declined.

 On the Federal Policies component, only two of the 21 demographic groups tracked were above 50.  The index shed 2.3 points in October, but regained 1.8 points in November.   Eighteen groups advanced on the index, while three 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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