Oct. 9 (Bloomberg) -- Following is the text of the October economic optimism index as released by TechnoMetrica Market Intelligence and Investors Business Daily.
The IBD/TIPP Economic Optimism Index improved by 2.2 points, or 4.2%, in October posting 54 vs. 51.8 in September. The index is 6.4 points above its 12-month average of 47.6, 9.6 points above its reading of 44.4 in December 2007 when the economy entered into the recession, and 4.1 points above its all-time average of 49.9.
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 824 adults from October 2 to October 7. The margin of error is +/-3.5 percentage points.
The IBD/TIPP Economic Optimism Index has three key components, all of which improved in October.
The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, gained 3.9 points, or 7.1%, to 59.1. 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, improved 2.0 points, or 3.4%, to reach 60.5.
Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working rose 0.8 points, or 1.9%, to reach 42.4.
“Confidence showed an unusual jump despite high gasoline prices and high unemployment. Democrats’ continued upbeat sentiment and recent stock market performance contribute to the optimism. Despite the optimism, 23% of households have at least one member of their household unemployed and looking for employment,” said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD’s polling partner.
“Perhaps buoyed by the performance of GOP nominee Mitt Romney in the debates, Republicans posted the biggest optimism gains of any major political group,” noted Terry Jones, associate editor of Investor’s Business Daily. “That’s a big reason why optimism is at its highest level since November of 2006.”
This month, 19 of the 21 demographic groups that IBD/TIPP tracks were above 50 on the Economic Optimism Index. Eighteen groups improved on the component and three declined.
On the Economic Outlook component, 20 of the 21 groups that IBD/TIPP tracks scored in optimistic territory. Nineteen groups improved on the component and two declined.
On the Personal Financial component, all 21 of the groups IBD/TIPP tracks scored in optimistic territory. Eighteen groups improved on the component, one remained the same as last month, and two declined.
On the Federal Policies component, three of the 21 demographic groups tracked were above 50. Eleven groups advanced on the component, two remained the same, and eight declined.
SOURCE: TechnoMetrica Market Intelligence and Investors Business Daily
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