Americans were a little less gloomy heading into the holiday season, but they were still far from merry according to the latest IBD/TIPP Economic Optimism Index.
The latest reading was 43.1, up from 41.4 a month earlier and the prior month's 2-year-low 38.4 just as the government shutdown got underway. But the index remained well below the neutral 50 level for a 14th straight month with the holiday shopping season getting underway.
The six-month economic outlook subindex rose 2.9 points, or 7.6% to 41.0. The personal finances outlook gauge edged up 0.4 point to 52.6. Confidence in federal economic policies popped 1.9 points, or 5.6%, to 35.7. In all three cases, the indexes were below their pre-shutdown levels.
The overall IBD/TIPP Economic Optimism Index enjoyed broad-based gains, with 18 of 21 demographic groups showing improvement. That includes Republicans, Democrats and independents.
Investors' confidence improved, buoyed by the S&P 500 and Dow industrials hitting record highs and the Nasdaq at the best level since 2000. Self-described noninvestors reported weaker sentiment.
The overall mood remains grim.
"Fifty percent think the U.S. is still in a recession, and 53% feel the economy is not improving," said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD's polling partner.
That doesn't bode well for the holiday shopping season. Macy's (M), Target (TGT), Wal-Mart Stores (WMT) and many other big chains opened earlier than ever on Thanksgiving. Opening weekend promotions were high too, with Wal-Mart and Target among those offering doorbuster deals for the Apple (AAPL) iPad Mini. Those extra hours and deals drove traffic, but actual sales may have declined. With six fewer days between Thanksgiving and Christmas, retailers may have to offer big promotions to bring customers back.
ObamaCare also has hurt a significant number of Americans at the workplace, Mayur noted.
"Six percent of households have at least one person whose work hours have been cut or limited to fewer than 30 hours per week in the past year due to ObamaCare," he said.