The IBD/TIPP Economic Optimism Index declined 3.6 points, or 6.5%, in April, posting a reading of 51.7 vs. 55.3 in March 2017. The index is 0.5 points above its 12-month average of 51.2, 7.3 points above its reading of 44.4 in December 2007 when the economy entered the last recession, and 2.5 points above its all-time average of 49.2.
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 telephone poll of 904 adults from March 24 to March 30 using live interviewers and both cell phone and landline numbers. The margin of error is +/-3.3 percentage points.
The IBD/TIPP Economic Optimism Index has three key components. This month, all three of the index components declined.
• The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, declined 2.5 points, or 4.7%, to 51.1. The sub-index was 32.1 when the economy entered the last recession in December 2007.
• The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months decreased 1.3 points, or 2.1%, to 61.3.
• Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, dropped 7.0 points, or 14.1%, to 42.6.
“Despite a little weakness in confidence compared to previous months, our index continues to be in optimistic territory. Americans are optimistic that President Donald Trump will deliver on his promises to cut taxes and lessen regulations which are likely to boost U.S. employment and grow the economy. Fifty-two percent believe that the economy is improving,” said Raghavan Mayur, president of TechnoMetrica, IBD's polling partner.
This month, 11 of the 21 demographic groups that IBD/TIPP tracks were above 50 on the Economic Optimism Index. Three groups improved on the index, while 18 declined.
On the Economic Outlook component, 10 of the 21 groups that IBD/TIPP tracks scored in optimistic territory. Four groups improved on the component, while 16 declined. One did not change.
On the Personal Financial component, 21 groups IBD/TIPP tracks scored in optimistic territory. Six groups increased, while fifteen declined.
On the Federal Policies component, only one of the 21 demographic groups tracked was above 50. Three groups advanced on the component and eighteen declined.