The IBD/TIPP Economic Optimism Index fell to 41.2 in May of 2022 from 45.5 in April only barely above March’s eight-year low of 41. Rising interest rates, Russia’s war in Ukraine, and China’s COVID-related lockdowns all impacted the mood. The six-month outlook for the US economy tumbled 6.5 points to 33.2, the lowest level since August 2011.
IBD/TIPP Economic Optimism Index May of 2022
- IBD/TIPP Economic Optimism Index in the US fell to 41.2 in May of 2022 from 45.5 in April
- Barely above March’s eight-year low of 41.
- The six-month outlook for the US economy tumbled 6.5 points to 33.2, the lowest level since August 2011.
- The gauge of support for federal economic policies sank 4.4 points to 40.1, the lowest since December 2015. The gauge got as high as 56.4 last June, after more rounds of stimulus checks and amid a big push for more expansive policies from President Biden. Yet now stimulus has lapsed, and the Federal Reserve is hiking interest rates to try and rein in the inflation that stimulus contributed to, along with pandemic-related supply constraints.
- The personal finances subindex slipped 1.8 points to 50.4 and household financial stress hit the highest level since April 2020, at the outset of the pandemic
- Gas prices continued to rise following Russia’s invasion of Ukraine and the inflation rate hit a new 40-year-high 8.5%.
Inflation eating away wage gains
The problem, however, is that the rise in consumer prices is eating away all those wage gains, and then some, for most Americans. The consumer price index rose 8.5% from a year ago in March, the biggest increase in 40 years.
The IBD/TIPP Poll finds that just 18% of adults say their wages have kept pace with inflation, while 51% say they haven’t kept pace. Meanwhile, 89% of Americans are concerned about the path of inflation over the next 12 months.
The IBD/TIPP Financial-Related Stress Index rose 1.4 points to 69.3% in May. That’s just below April 2020’s 69.8 record in polling back to December 2007. Readings above 50 mean financial stress is rising.
Despite labor market tightness, the IBD/TIPP Poll finds that 37% of households have at least one member who is out of work and looking for employment, down 4 points from April. Now 30% are concerned about job loss in the household, down 2 points. Factoring in the overlap, the share of job-sensitive households is currently 48%, down 4 points from last month.
Biden Job Approval, Direction Of Country: IBD/TIPP Poll
Each month, the IBD/TIPP Poll, a collaboration between Investor’s Business Daily and TechnoMetrica, produces an exclusive Presidential Leadership Index. In addition to tracking President Joe Biden’s job approval rating, the index combines results from several questions in the monthly IBD/TIPP Poll to gauge how well the president is viewed when it comes to leading the country, both domestically and internationally.
In addition, IBD/TIPP each month asks questions focused on the public’s outlook overall. These questions gauge satisfaction with the direction of the country, respondents’ quality of life, and the United States’ standing in the world.
IBD/TIPP Economic Optimism Index
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. To gauge Americans’ views on the U.S. economy, the IBD/TIPP Economic Optimism Index is based on a survey of 1,200 adults conducted using a network of online panels. The national poll is generally conducted in the first week of the month.
The IBD/TIPP Economic Optimism Index is made up of three subindexes, including one for the respondent’s outlook six months into the future, the respondent’s personal financial outlook, and how the respondent views current federal policies. The goal each month is to give as accurate a reading of the current state of the U.S. economy as possible.
From The TradersCommunity News Desk