IBD/TIPP Economic Optimism Index Declines Across All Categories for First Time Since Trump Elected

LOS ANGELES, March 07, 2017 (GLOBE NEWSWIRE) -- The IBD/TIPP Economic Optimism Index declined 1.1 points, or 2.0%, in March, posting a reading of 55.3 vs. 56.4 in February 2017. The index is 4.6 points above its 12-month average of 50.7, 10.9 points above its reading of 44.4 in December 2007 when the economy entered the last recession, and 6.1 points above its all-time average of 49.2. The Economic Optimism Index also registered above the neutral 50 level for the sixth straight month, after signaling pessimism for 17 months from May 2015 through September 2016.

Note: Index readings above 50 indicate optimism; below 50 indicate pessimism.

The IBD/TIPP Economic Optimism Index has a solid track record of foreshadowing the confidence indicators released later each month by the University of Michigan and The Conference Board. IBD/TIPP conducted the national telephone poll of 909 adults from February 24 to March 4 using live interviewers and both cell phone and landlines. The margin of error is +/-3.3 percentage points.

The IBD/TIPP Economic Optimism Index has three key components. This month, all three 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 2.0 points, or 3.6%, to 53.6. This was the third straight decline from December's 56.3, though the current level still represents a huge recovery from 36.7 in July 2016.

  • The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months decreased 0.2 points, or 0.3%, to 62.6 after rising in February to the highest level since October 2004.

  • Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, dropped 1.3 points, or 2.6%, to 49.6, just below the neutral level, after signaling optimism for the first time in a decade in February. Among rural Americans, the approval rating of federal economic policies, which had surged to the highest level since April 2003 a month ago, fell 7.1 points to a still-positive 53.6 in March.

“A majority of Americans think that the economy is improving. They are also optimistic President Donald Trump will deliver on his promises of  tax cuts and fewer regulations, which are likely to boost U.S. employment and grow the economy,” said Raghavan Mayur, president of TechnoMetrica, IBD's polling partner. “The stock market has also posted spectacular gains since he won the election.”

“Strong gains in the stock market and continued high optimism bode well for the economy, even though by historical standards the economy would seem to be overdue for a downturn,” said Terry Jones, Commentary editor of Investor’s Business Daily. “The six-month string of readings in optimistic territory suggests a major turnaround in economic sentiment.”

The Breakdown

This month, 19 of the 21 demographic groups that IBD/TIPP tracks were above 50 on the Economic Optimism Index. Five groups improved on the index, while 16 declined.

On the Economic Outlook component, 13 of the 21 groups that IBD/TIPP tracks scored in optimistic territory. Six groups improved on the component, while 15 declined.

On the Personal Financial component, 21 groups IBD/TIPP tracks scored in optimistic territory. Ten groups increased, while 11 declined.

On the Federal Policies component, nine of the 21 demographic groups tracked were above 50. Seven groups advanced on the component and 14 declined.

The IBD/TIPP Economic Optimism Index is the earliest take on consumer confidence each month and predicts with good reliability monthly changes in sentiment in well-known polls by The Conference Board and the University of Michigan. The IBD/TIPP Economic Optimism Index is based on a survey of 900-plus adults chosen at random nationwide. The national poll is generally conducted in the first week of the month by live interviewers and includes both cell phone and landlines.

For more information, go to www.tipponline.com. To license the IBD/TIPP Poll, please contact: IBDlicensing@investors.com.

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