U.S. IBD/TIPP November Economic Optimism Index (Text)

Following is the text of the November economic optimism index as released by TechnoMetrica Market Intelligence and Investors Business Daily.

Consumer Confidence Edges Up, Americans Still Pessimistic

The IBD/TIPP Economic Optimism Index improved by 0.3 points, or 0.7%, in November posting 40.6 vs. 40.3 in October. The index is 2.6 points below its 12- month average of 43.2 and 3.8 points below its reading of 44.4 in December 2007 when the economy entered into the recession, and 9.4 points below its all-time average of 50.0.

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

The IBD/TIPP Economic Optimism Index has a good track record of foreshadowing the confidence indicators put out later each month by the University of Michigan and The Conference Board. IBD/TIPP conducted the national poll of 901 adults from October 31 to November 6. The margin of error is +/-3.3 percentage points.

The IBD/TIPP Economic Optimism Index has three key components, two of which declined in November.

The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, increased 4.1 points, or 11.2%, to 40.8. The sub-index was 32.1 when the economy entered the last recession in December 2007.

The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, declined 2.3 points, or 4.4%, to reach 49.6.

Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working slipped 0.8 points, or 2.5%, to reach 31.4.

“Consumer confidence continues to be in vulnerable territory, despite its modest improvement second month in a row,” said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD’s polling partner.

“Like the economy itself, the IBD/TIPP optimism index is inching higher, but it lacks the kind of power expected in a strong recovery,” said Terry Jones, associate editor of Investor’s Business Daily. “The continued low level of confidence shown in the poll suggests that, at best, the economy will show only tepid growth in the coming months.”

The Breakdown

This month, three of the 21 demographic groups that IBD/TIPP tracks were above 50 on the Economic Optimism Index. Twelve groups increased on the index.

On the Economic Outlook component, three of the 21 groups that IBD/TIPP tracks scored in optimistic territory. Nineteen groups improved in November.

On the Personal Financial component, ten of the groups IBD/TIPP tracks scored in optimistic territory. Six groups improved on the component and fifteen declined.

On the Federal Policies component, all of the 21 demographic groups tracked were below 50. Seven groups advanced on the component and fourteen declined.

ABOUT THE IBD/TIPP POLL

The IBD/TIPP Economic Optimism Index is the earliest take on consumer confidence each month and predicts with 80% 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 poll is generally conducted in the first week of the month.

SOURCE: TechnoMetrica Market Intelligence and Investors Business Daily

To contact the reporter on this story: Chris Middleton in Washington at cmiddleton2@bloomberg.net

To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net

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