The IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, fell another 6.2% as it continues a five-month descent. The November index moved from 46.8 in October to its current reading of 43.9, keeping the index in negative territory for a third consecutive month. For the IBD/TIPP indexes, a reading above 50.0 signals optimism and below 50.0 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.

For the November index, IBD/TIPP surveyed 1,306 adults from October 27 - October 29. 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.

After a modest rise in October, the Presidential Leadership Index plummeted once again, moving from 51.0 last month to 46.0 this month -- a 9.8% drop. This also returns the index to negative territory. The Favorability and Job Approval components fell by double digits, 10.3% and 10.2% respectively, placing all index components in negative territory as Favorability (47.1) drops below 50.0 for the first time in Biden’s presidency.

The National Outlook Index also trended south, with every component declining this month. It moved from 46.8 in October to 42.7 in November, its lowest point since September 2020 (38.4). Direction of the Country dropped the most at 10.5%, shifting from 45.9 last month to 41.1 this month.

Despite a slight improvement last month, the Financial Related Stress Index jumped up 5.2% in November. Its reading of 67.3 is now the highest since April 2020 (69.8) -- which was the highest since the end of 2008 amid the financial crisis. A reading over 50.0 equals more financial stress, while a reading below 50.0 on this index would indicate consumers feel less stress. This index was last below 50.0 in February 2020 (48.1).

“Inflationary concerns are driving worrisome economic trend lines,” said Ed Carson, IBD's news editor. “Labor shortages may start to ease, however, as people use up their pandemic savings, and we could start to see auto production turn the corner. Still, the present situation may require intervention from the Fed to keep inflation from getting out of hand.”

The flagship IBD/TIPP Economic Optimism Index has three key components. This month, all three declined.

• The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, fell by 6.5% to 38.6, after spending the last two months at 41.3. This component has now fallen a staggering 23.1% since August (50.2).
• The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months declined by 3.7%, moving from 53.9 in October to 51.9 in November. It is the only index component to remain in positive territory.
• Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, dropped the most at 9.3%. The index fell from 45.3 last month to 41.1 this month to hit its lowest point since April 2016 (40.3).

“Americans’ general confidence is shaken as inflation expectations are baked into everything. This could become a self-fulfilling prophecy,” noted Raghavan Mayur, president of TechnoMetrica, who directed the poll. “Only 27% of people believe the economy is improving, while 83% are worried about inflation. In fact, 70% say they will cut back on gifts this holiday season due to these concerns.”

Economic Optimism Index Breakdown

This month, just three 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 down from eight in September and October, 14 in August and July, 18 in June, 17 in May and April, and 16 in March. Three groups rose this month vs. six in October, just one in September and August, six in July, 15 in June, seven in May, 14 in April and 19 in March.

For the Six-Month Economic Outlook component, two of 21 groups that IBD/TIPP tracks scored in optimistic territory vs. four in October, five in September, eight in August, nine in July, 17 in June, 13 in May, 15 in April and 12 in March. Optimism over the economy’s six-month outlook rose in three groups vs. 11 in October, zero in September, 10 in August, just one in July, 15 in June, nine in May, 15 in April and 18 in March.

For the Personal Financial component, 11 groups IBD/TIPP tracks were in optimistic territory vs. 16 in September and October, 19 in August and July, 18 in June, 13 in May, 19 in April and 17 in March. Three groups rose after eight did in October vs. three in the prior two months, 15 in July, 10 in June, nine in May and April, and 15 in March.

For the Federal Policies component, three of the 21 demographic groups tracked were above 50.0 vs. eight in October, nine in September, 10 in August, 12 in July, 17 in June, 13 in May, 16 in April and 14 in March. Just four groups rose vs. three in October, two in September, 12 in August, three in July, 18 in June, four in May, 12 in April and 20 in March.

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.

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