The IBD/TIPP Economic Optimism Index continued to surge in August, gaining 1.6 points to 58, the highest point since January 2004. Americans feel better about their own personal finances than in any other month, save one, in the nearly 18-year polling history.
Do President Donald Trump and Trumponomics deserve credit for the economy? Democrats resoundingly say, "No," but political independents are beginning to think so. Independents' view of federal government economic policies rose to the highest level in more than a decade. That could be key as Republicans try to keep control of Congress in midterm elections this fall.
The IBD/TIPP Economic Optimism Index surged past February's 13-year high of 56.7 set in the wake of tax cuts. Readings above the neutral 50 level reflect optimism.
Economic Optimism Index Components
The Economic Optimism Index is a composite of three major subindexes. They track views of near-term economic prospects, the outlook for personal finances, and views of how well government economic policies are working.
The six-month economic outlook gauge jumped 3.4 points to 56.8, continuing a resurgence since it dipped into pessimistic territory in April, though still a bit below February's 13-year high 57.5.
The six-month personal financial outlook index gained 2.3 points to 65.1, just below the poll's lifetime high of 65.3 in January 2004.
Meanwhile, the measure of confidence in federal economic policies, which had jumped 4.6 points in July, slipped eight-tenths of a point to 52.1. Federal policies have rarely been more popular among Republicans (79.6) or less popular among Democrats (24.8). But independents quietly are becoming mildly optimistic about federal economic policies (51.2). That's the highest reading in more than a decade.
Stock Market Rising
Despite a volatile stock market, the S&P 500 index rose in July, its fourth straight monthly gain. The S&P 500 index closed Monday at a six-month high, just below its Jan. 26 peak. The S&P 500 rose modestly Tuesday morning, less than 1% below an all-time best.
The IBD/TIPP Poll reflects 939 responses collected from July 26 to Aug. 2.
In early July, the China trade war went live with Trump tariffs of 25% on an initial $34 billion in Chinese imports. Trump has since threatened to hit another $200 billion worth of Chinese imports. The Trump administration also pledged to aid farmers hurt by China's retaliation. Meanwhile, the Nasdaq composite hit a record high on July 25. It's just below that peak.
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