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Tags: economic confidence declines | market volatility | energy prices

IBD/TIPP Economic Optimism Index Declines to 41.2

401(k)
(Dreamstime)

By    |   Wednesday, 18 May 2022 11:06 AM EDT

The IBD/TIPP Economic Optimism Index has declined further into the pessimistic zone, declining by 4.3 points, or 9.5%, from 45.5 in April to 41.2 in May.

Issued each month by Investor's Business Daily, a reading on the index below 50 indicates U.S. consumers are not confident. The index first fell below 50 last September, where it has remained over the past nine months.

IBD notes that consumer spending drives two-thirds of the U.S. economy.

May's figure declined further due to the average household paying nearly $250 more a month to cover bills.

Americans are also concerned about accelerated market volatility in the past two months, as well as the Ukraine war and Russia sanctions, China’s zero-COVID policies’ impact on supply chains, inflation and high energy prices.

The American public is also starting to worry about recession and/or stagflation.

Nasdaq is down 26.34% year-to-date and is in the vicinity of bear-market territory, IBD says. Individual technology stocks that have taken a beating include Facebook (FB), down 40.9% YTD; Netflix (NFLX), down 68.8% YTD; and Google (GOOG), down 20.9%.

Broken down into its three main components, the IBD/TIPP Economic Optimism Index declined in all three areas: U.S. economic prospects and personal finances for the next six months, and the effectiveness of government economic policies.

As in past years, people who belong to the party of the president are more optimistic about the economy. Democrats' confidence level is 62.2, followed by independents at 32.8 and Republicans at 24.0.


 

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StreetTalk
The IBD/TIPP Economic Optimism Index has declined further into the pessimistic zone, declining by 4.3 points, or 9.5%, from 45.5 in April to 41.2 in May.
economic confidence declines, market volatility, energy prices
249
2022-06-18
Wednesday, 18 May 2022 11:06 AM
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