2008 record      


The IBD/TIPP Economic Optimism Index signaled pessimism for a ninth straight month, retreating further in recent weeks as Federal Reserve talk of curbing the massive monetary stimulus roiled financial markets, hurting investor confidence.


The overall Optimism Index fell to 47.1 in July after jumping to 49 in June. The measure has been below the break-even 50 level since October. The six-month outlook gauge fell 6.2% to 48.1 after spiking 8.1 points to 51.2 in June. The personal financial outlook dipped 1.5 points to 56.1. Confidence in federal economic policies slipped 1.1 points to 37.2.

The overall reading for investors fell 3.6 points to 48.2. The reading had turned slightly positive in early June. But stocks have fallen and bond yields have spiked worldwide as the Fed steps up plans to taper its $85 billion in monthly bond buys, or quantitative easing. Ultra-easy money has suppressed interest rates and fueled big equity gains. In recent days Treasury yields have stabilized and stocks are attempting a new rally.

Among noninvestors, sentiment improved for a second straight month, up 0.8 point to 47.2.

The real economy remains weak; 25% of households say at least one member is seeking full-time employment. But the U.S. does continue to grow, with housing a bright spot. Soaring mortgage rates from the Fed's QE exit may curb home sales and price gains, but that hasn't happened. Auto sales also remain strong — fueled by housing-related truck sales — as Wednesday's reports from Chrysler, Ford Motor (F) and General Motors (GM) showed. Toyota (TM), Honda (HMC) and others also will report U.S. sales later in the day.

On a partisan level, economic optimism fell among Republicans and Democrats, but nudged up among independents.

The weaker Economic Optimism Index may have been a modest drag on President Obama's approval. But revelations about the government's widespread surveillance programs seemed to be a bigger factor. The IBD/TIPP Presidential Leadership Index plunged 11.7% to 43.2, Obama's lowest reading ever in office.

Submit to DeliciousSubmit to DiggSubmit to FacebookSubmit to Google PlusSubmit to StumbleuponSubmit to TechnoratiSubmit to TwitterSubmit to LinkedIn