Press release

Economic Optimism Jumps 11% in April, Buoyed by Six-Month Outlook, in Latest IBD/TIPP Poll

0
Sponsored by Businesswire

The IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, climbed 11.0% in April to reach its highest point of 2022 after three consecutive months of decline. The overall reading now stands at 45.5, up from 41.0 last month. Despite the positive gains, the index remains in negative territory for the eighth straight month. A reading above 50.0 signals optimism and below 50.0 indicates pessimism on IBD/TIPP indexes.

Advertising
Advertising

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 April index, IBD/TIPP surveyed 1,305 adults April 6-8. 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 rose, up 8.0%, from 45.1 in March to 48.7 in April. Additionally, the Favorability component improved by 8.7%, moving the component out of negative territory to neutral – 50.0. All remaining components increased as well but were still situated in negative territory.

The National Outlook Index continued to trend up in April. It increased by 6.9%, shifting from 42.3 last month to 45.2 this month. The Quality of Life component, the only component in positive territory, built a bit more cushion by improving from 50.5 in March to 52.1 in April – its highest mark since December 2021 (54.7).

Financial Related Stress increased again this month, however. Its reading of 67.9 was up 2.3% from last month’s 66.4. This reflects the highest level of stress consumers have experienced since April 2020 (69.8). 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).

“Inflation remains a key concern, and 48% of respondents believe we are now in a recession, but economic optimism overall has improved,” said Ed Carson, IBD’s news editor. “With the Six-Month Economic Outlook jumping a whopping 17.1% this month, sentiment could be turning to become more cautiously optimistic about long-term prospects. This is definitely a component to watch in the coming months.”

The flagship IBD/TIPP Economic Optimism Index has three key components. In April, all three improved.

  • The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, rose 17.1% this month. Its reading of 39.7, while still well below 50.0, has reached its highest point of 2022 so far.
  • The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, also climbed significantly. Its reading of 52.2 is up 10.4% this month, moving the component back into positive territory.
  • Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, increased for the second consecutive month, moving from 41.9 in March to 44.5 in April (up 6.2%).

“Gas prices remain high, despite the release of oil reserves and the price of oil going down, but consumers see steps being taken to ease the pain at the pump. Energy independence has become an even greater priority for Americans over the last month,” said Raghavan Mayur, president of TechnoMetrica, who directed the poll. “As the war in Ukraine rages on, Americans’ views on what matters most to them are shifting, and understanding these shifts could be key to the midterm elections.”

Economic Optimism Index Breakdown

This month, seven 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. three in both March and February, five in January, seven in December, three in November, eight in September and October, 14 in August and July and 18 in June. Twenty groups rose in April vs. three groups in March, eight in February, three in January, 18 in December, three in November, six in October, just one in September and August, six in July and 15 in June.

For the Six-Month Economic Outlook component, three of 21 groups that IBD/TIPP tracks scored in optimistic territory vs. one in March, one in February, one in January, six in December, two in November, four in October, five in September, eight in August, nine in July and 17 in June. Optimism over the economy’s six-month outlook rose for 20 groups vs. one group in March, 11 in February, four in January, 18 in December, three in November, 11 in October, zero in September, 10 in August, one in July and 15 in June.

For the Personal Financial component, 14 groups IBD/TIPP tracks were in optimistic territory vs. six in March, 14 in February, 15 in January and December, 11 in November, 16 in September and October, 19 in August and July and 18 in June. Nineteen groups rose after two did in March, none did in February, six in January, 17 in December, three in November and eight in October, three in August and September, 15 in July and 10 in June.

For the Federal Policies component, six of the 21 demographic groups tracked were above 50.0 vs. three in March and February, two in January, eight in December, three in November, eight in October, nine in September, 10 in August, 12 in July and 17 in June. Eighteen groups rose vs. 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 www.tipponline.com. To license the IBD/TIPP Poll, please contact IBDlicensing@investors.com.

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.