2008 record      

 

Americans felt better about their personal finances at the start of October than at any time in the 18-plus years of the IBD/TIPP Poll. Trump tariffs also got a vote of confidence as support for federal economic policies hit the highest level since 2005.

Overall, the IBD/TIPP Economic Optimism Index rose 1.9 points to 57.8, just off the 14-year high of 58.0 touched in August. Readings above the neutral 50 level indicate optimism. Self-described investors were especially optimistic (61.5), while others were only moderately so (53.1).

The IBD/TIPP Poll reflects 905 responses collected from Sept. 27 to Oct. 3. The S&P 500 index closed at 2925.51 on Oct. 3, within 1% of its record high set in September. Subsequently, the S&P 500 has retreated amid rising interest rates. On Sept. 24, Trump tariffs of 10% on $200 billion in Chinese imports took effect. On Oct. 1, President Trump announced a deal to replace Nafta and hailed a "new dawn" for the auto industry, though analysts mostly begged to differ.

Meanwhile, wage growth has accelerated. The September jobs report released on Friday showed that average hourly wages grew at a 3.3% annual rate over the past six months. The jobless rate hit a 49-year low of 3.7%. On Oct. 2, Amazon embraced a $15 minimum wage, giving a pay hike to 250,000 Amazon (AMZN) employees and 100,000 seasonal hires.

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 held at 53.3. The subindex hit a 13-year high of 57.5 in February on the heels of tax cuts.

The six-month personal financial outlook index jumped 4.1 points to 66.7, easily clearing August's 14-year high of 65.1.

Meanwhile, the measure of confidence in federal economic policies climbed 2.1 points to 53.4, safely in optimistic territory. Optimistic readings had been a rarity since the financial crisis. Satisfaction with Trumponomics, Trump tariffs and all, is highest among households with only a high-school education (63) and lowest among those with a college degree or higher (49.5).

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