Economic Optimism Hits 15-Year High According to May IBD/TIPP Poll

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The IBD/TIPP
Economic Optimism Index, a leading national poll on consumer
confidence, rose 8.1 percent in May to reach its highest level since
February 2004. The 58.6 reading also ensured that the index continues
its record run, remaining in positive territory for 32 consecutive
months. An index reading below 50 for the IBD/TIPP indexes indicates
pessimism while above 50 signals optimism.

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. IBD/TIPP
conducted its national telephone poll of 900 adults from April 26 to May
5, using live interviewers and both cell phone and landline numbers. The
margin of error is +/-3.3 percentage points.

In addition to the Economic Optimism Index, IBD/TIPP surveyed
respondents on key political issues for the separate Presidential
Leadership Index and National Outlook Index, as well as the Financial
Related Stress Index. The Presidential Leadership and National Outlook
indexes rose across every component, and the Financial Related Stress
Index continued to improve. The Presidential Leadership Index climbed
5.4 percent to 47.0, its highest reading since March 2017, while the
National Outlook Index rose 5.2 percent, going from 46.4 in April to
48.8 in May.

The Financial Related Stress Index reflected that consumers feel lower
amounts of financial stress, declining for the third consecutive month
and remaining in favorable territory. Stress fell by 3.0 percent, moving
from 49.9 last month to 48.4 this month. A reading below 50 on this
index indicates that consumers feel less financial stress while a
reading above 50 equals more financial stress.

“Despite political gamesmanship and partisan divides, Americans believe
the economy is a clear bright spot,” said Terry Jones, IBD’s Commentary
Editor. “There have been ripples of uncertainty over the past several
months, but with May’s Economic Optimism Index hitting a 15-year high,
consumers have seemingly moved past their doubts on the issue that
directly impacts their pocketbook.”

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

The Six-Month Economic Outlook, a measure of how consumers feel
about the economy’s prospects in the next six months, increased the
most of all components. It rose 14.3 percent and returned to positive
territory, yielding a reading of 55.8 in May, up from 48.8 in April.
It remains substantially above the 32.1 reading 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, increased 3.2
percent. Its reading moved from 62.4 last month to 64.4 this month.
Confidence in Federal Economic Policies, a proprietary IBD/TIPP
measure of views on how government economic policies are working,
moved up 8.0 percent. The component rose from 51.5 in April to 55.6 in
May. That’s the best reading since April 2003.

“With the latest jobs report and unemployment at its lowest rate since
1969, Americans are extremely optimistic about their economic prospects,
with our index at its 184-month high,” said Raghavan Mayur, president of
TechnoMetrica Market Intelligence, IBD’s polling partner. “Sixty percent
think that the economy is improving. As a result of the strong economy,
Trump is trending up as well. Over one half give the President an A or B
grade for his handling of the economy. Indicative of the positive
sentiment, Americans also report low financial stress levels.”

The Breakdown

This month, 19 of 21 demographic groups — such as age, income, race,
and party preference — that IBD/TIPP tracks were above 50 on the
Economic Optimism Index. That is up from 14 in April. All 21 groups rose
during the month, vs. 13 in April.

On the Economic Outlook component, 18 of the 21 groups that IBD/TIPP
tracks scored in optimistic territory, vs. eight in April, 10 in March,
and just two in February.

On the Personal Financial component, all 21 groups IBD/TIPP tracks
remained in optimistic territory, as 14 groups rose while six declined,
and one was unchanged. Notably, the index stood at 64.4 in May, after
hitting an all-time high of 66.7 in October.

On the Federal Policies component, 17 of the 21 demographic groups
tracked were above 50, up from 11 in April. Eighteen groups rose and
three fell.

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 900-plus adults chosen at random nationwide. The national
poll is generally conducted in the first week of the month by live
interviewers and both cell phone and landlines.

For more information, go to www.tipponline.com.
To license the IBD/TIPP Poll, please contact: IBDlicensing@investors.com.

About IBD

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organization recognized for proprietary stock screens, comparative
performance ratings and a record of identifying stock leaders as they
emerge. The company takes a data-first approach to investing, educating
investors about how to invest successfully using tested methods and
sound research. IBD has honed its approach over the last 50 years to
help investors make smarter decisions. Its stock lists have outperformed
the S&P, and its presidential poll, the most accurate over the past four
election cycles, was one of only two national polls to accurately
predict the outcome of the 2016 Presidential Election. IBD offers a
number of interactive stock research tools and provides information for
investors of every level. To learn more about all that IBD has
available, please visit www.investors.com.

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