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As Six-Month Outlook Plummets, Latest IBD/TIPP Poll Shows that Economic Optimism is DownThe IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, dropped 9.5% in May. The overall reading now stands at 41.2, down from last month's 45.5. This keeps the index in negative territory for the ninth consecutive month. A reading above 50.0 signals optimism and below 50.0 indicates pessimism on IBD/TIPP indexes. 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. For the May index, IBD/TIPP surveyed 1,320 adults May 4-6. The poll was conducted online using TechnoMetrica's network of online panels to provide the sample. IBD/TIPP also surveyed respondents on key political issues for the separate Presidential Leadership Index and National Outlook Index, as well as the Financial Related Stress Index. This month, the Presidential Leadership Index was down across the board. Its overall reading of 44.7 declined 8.2% from April's 48.7 reading, and the Favorability component returned to negative territory after rising to hit neutral - 50.0 - last month. It now stands at 46.0 after an 8.0% stumble. The National Outlook Index declined the most of any index in May. It dropped 10.2%, falling from 45.2 in April to 40.6 this month. The Quality of Life component returned to negative territory (48.6) after reaching 52.1 last month, while the Morals & Ethics (32.7), Direction of the Country (37.2), and Standing in the World (38.9) components all dropped by double-digit percentages - 14.4%, 14.1% and 10.8% respectively. Financial Related Stress also continued to increase this month, hitting a new high point since April 2020's 69.8. Its current reading of 69.3 was up 2.1% from last month's 67.9. A reading over 50.0 on this index equals more financial stress while a reading below 50.0 would indicate consumers feel less stress. The index was last below 50.0 in February 2020 (48.1). "Last month's flicker of optimism evaporated this month," said Ed Carson, IBD's news editor. "With the Economic Optimism Index dropping significantly and the Six-Month Economic Outlook at its lowest point in more than a decade, a true economic slowdown likely is nearing, if it's not already here." The flagship IBD/TIPP Economic Optimism Index has three key components. In May, all three declined.
Economic Optimism Index Breakdown This month, four of 21 demographic groups - such as age, income, race and party preference - that IBD/TIPP tracks were above 50.0, in positive territory, on the Economic Optimism Index. That's vs. seven in April, three in both March and February, five in January and seven in December. Just one group rose in May vs. 20 in April, three groups in March, eight in February, three in January and 18 in December. For the Six-Month Economic Outlook component, one of 21 groups that IBD/TIPP tracks scored in optimistic territory vs. three in April, one in March, February and January and six in December. Optimism over the economy's six-month outlook rose for no groups in May vs. 20 in April, one in March, 11 in February, four in January and 18 in December. For the Personal Financial component, nine groups IBD/TIPP tracks were in optimistic territory vs. 14 in April, six in March, 14 in February and 15 in January and December. Six groups rose after 19 did in April, two in March, none in February, six in January and 17 in December. For the Federal Policies component, four of the 21 demographic groups tracked were above 50.0 vs. six in April, three in March and February, two in January and eight in December. Just one group rose in May vs. 18 in April, 10 in March, four in February, five in January, 18 in December, four in November, three in October, two in September, 12 in August, three in July and 18 in June. 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 about 1,300 adults conducted using a network of online panels. The national poll is generally conducted in the first week of the month. For more information, go to https://tippinsights.com/. To license the IBD/TIPP Poll, please contact [email protected]. About IBD Investor's Business Daily (IBD) is the leader in stock research and education. For over 35 years, IBD has helped countless investors around the world make more money in the market and achieve their financial goals. Founded with the mission of democratizing stock investing, IBD provides its customers access to the same type of research Wall Street uses to make decisions. All of IBD's products and content are based on a time-tested investing methodology, which uses fundamental and technical analysis to identify leading stocks before their big price increases. IBD helps its customers succeed in the market with its unparalleled stock research including market-beating stock lists, proprietary stock ratings and powerful investing tools that help them make more profitable trading decisions. In addition, IBD provides customers with world-class investing education that includes product coaching, interactive webinars, live and virtual workshops, videos, online courses and more. IBD joined the Dow Jones and News Corp family of companies in May 2021. IBD reaches investors around the world via its main website, www.investors.com, its portfolio of digital products (IBD Digital, MarketSmith, Leaderboard, SwingTrader and IBD Live), mobile apps, a weekly print edition, social media and more. To learn more about all that IBD has available, please visit www.investors.com. © 2022 Investor's Business Daily, LLC. All rights reserved. Investor's Business Daily, IBD, Leaderboard and IBD Live are registered trademarks of Investor's Business Daily, LLC. MarketSmith and CAN SLIM are registered trademarks of O'Neil Capital Management Inc.
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