Political issues cause Presidential Leadership and National Outlook Indexes to stumble
LOS ANGELES–(BUSINESS WIRE)–The IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, rose 0.6%, from 52.6 in October to 52.9 in November. The index now remains above 50.0 for a record 38 consecutive months. An index reading below 50.0 for the IBD/TIPP indexes indicates pessimism.
The IBD/TIPP Economic Optimism Index has established a strong track record of foreshadowing the confidence indicators issued later each month by the University of Michigan and The Conference Board. IBD/TIPP conducted its national telephone poll of 903 adults from October 24 to October 31, using live interviewers and both cell phone and landline numbers. The margin of error is +/-3.3 percentage points.
In addition to the Economic Optimism Index, IBD/TIPP surveyed respondents on key political issues for the separate Presidential Leadership Index and National Outlook Index as well as the Financial Related Stress Index.
After modest increases over the last two months, November’s Presidential Leadership Index declined across every component and fell by 5.6% overall. Its November reading was 42.3, down from 44.8 in October. President Trump’s Job Approval rating took the sharpest hit, dropping 7.2% to 41.3 and falling to its lowest level since the government shutdown.
The National Outlook Index also declined in November, moving from 45.9 in October to 43.7 this month — down 4.8%. Two index components stood out for their double digit drops — Morals & Ethics fell 12.5% from a reading of 30.5 in October to 26.7 in November, while Standing in the World dropped 11.0%, from 44.4 to 39.5, its lowest reading since December 2017.
The Financial Related Stress Index reflected slightly less stress for the second straight month. November’s reading of 51.2 decreased 0.9% from 52.8 in October. A reading below 50.0 on this index indicates that consumers feel less financial stress while a reading above 50.0 equals more financial stress. The index has been above 50.0 for three consecutive months.
“Americans generally feel good about the economy, particularly their own prospects, but they do not give President Trump a lot of credit,” said Terry Jones, IBD’s commentary editor. “Across all of the indexes, the components directly related to the economy or personal finances were the only measures to rise in November. Every single component related to leadership or federal policies declined. As we move closer to election season, these numbers will be worth watching.”
The flagship IBD/TIPP Economic Optimism Index has three key components. This month, two components increased and one declined.
- The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, increased by 8.0%. However, the component remains in negative territory with a reading of 47.0, up from 43.5 last month.
- The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, rose by 1.8% in November. It yielded a reading of 61.7 this month compared to 60.6 last month.
- Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, declined 6.5%, moving from 53.6 last month to 50.1 in November.
“The phase one trade deal with China coupled with a strong labor market, has helped to stabilize American’s economic confidence,” said Raghavan Mayur, president of TechnoMetrica who directed the poll. “In addition, the stock market is reaching new highs, which helps boost consumer sentiment. Even though Americans are split on the direction of the economy, recession fears stay low. Low inflation and fuel prices are reducing pressure on consumer wallets. The constant drumbeat of impeachment has yet to take its toll on consumer confidence.”
The Breakdown
This month, 16 of 21 demographic groups — such as age, income, race and party preference — that IBD/TIPP tracks were at or above 50 on the Economic Optimism Index. That’s two higher than in October and September and the same as in August. Fourteen groups rose during the month, up from 12 in October, three groups in September and five in August. All groups rose in July, following an across-the-board drop in June.
On the Economic Outlook component, six of the 21 groups that IBD/TIPP tracks scored in optimistic territory, versus just one in October, three in September, 11 in August, 13 in July and four in June. Optimism has downshifted sharply, with only Republicans among the three major political affiliations remaining optimistic.
On the Personal Financial component, all 21 groups IBD/TIPP tracks again remained in optimistic territory, as in October. That’s up from 19 in September. Fourteen groups rose and one stayed the same, after 12 groups rose in October, three groups rose in September and seven in August. Significantly, one of those groups was Democrats for a second consecutive month. Five groups fell, down from eight in October, 18 in September and 14 in August. In July, 17 rose and just four fell. In June, three groups rose while 18 declined.
On the Federal Policies component, 10 of the 21 demographic groups tracked were above 50, down from 13 in October, 11 in September, 12 in August and 16 in July. This month, five groups rose, compared to 15 in October, six in September, four in August and 19 in July.
ABOUT THE IBD©/TIPP POLL
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 both cell phone and landlines.
For more information, go to www.tipponline.com. To license the IBD/TIPP Poll, please contact: [email protected].
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