The IBD/TIPP Economic Optimism Index rose 3.3 points to an eight-month high of 53.6 in November, remaining in optimistic territory for a 14th straight month, but high-earning households stood out as the only group feeling particularly bullish.
Among households earning more than $75,000, IBD/TIPP's optimism gauge jumped 4.6 points in November to 56.6, firmly above the neutral level of 50. By contrast, households earning less than $30,000 and those with earnings from $50,000 to $75,000 both reflected slight pessimism at 49.5. Modest optimism prevailed among those earning between $30,000 and $50,000, with a 51.3 reading.
A surging stock market, a strong job market that has seen unemployment sink to a 17-year low of 4.1%, and Washington's shift to tax cuts from ObamaCare subsidy cuts have all buoyed optimism, but especially among higher earners.
The lack of more widespread optimism probably reflects a combination of political division and a prolonged period of tepid wage growth. Still, there's some evidence that wages are perking up, especially among modest-wage earners.
Target (TGT) just hiked its minimum wage to $11 from $10 an hour, with a commitment to hit $15 in 2020. Amazon.com (AMZN) has put pressure on other employer to raise wages with its hiring binge, including a one-day spree in August in which it aimed to hire 50,000 people at $12 an hour or more.
The Economic Optimism Index is a composite of three major subindexes that track views of near-term economic prospects, the outlook for personal finances over the coming six months, and views of how well government economic policies are working.
The gauge of the six-month economic outlook rose 3.1 points to 51.8, bouncing back after weakness in the South after it was battered by hurricanes.
The six-month personal financial outlook index climbed 2.1 points to 61.6.
The measure of confidence in federal economic policies rebounded 4.5 points to 47.3. Among the four income groups, only the highest earners are optimistic about Washington policies — and just barely, at 50.6.
The poll, which included 917 respondents, was conducted Oct. 26-Nov. 3.
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