Following is the text of the March economic optimism index as released by TechnoMetrica Market Intelligence and Investors Business Daily.
The IBD/TIPP Economic Optimism Index declined by 5.1 points, or 10.8%, in March, posting 42.2 vs. 47.3 in February. The index is 5.5 points below its 12-month average of 47.7, 2.2 points below its reading of 44.4 in December 2007 when the economy entered the recession, and 7.5 points below its all-time average of 49.7.
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 847 adults from February 25 to March 4. The margin of error is +/-3.4 percentage points.
The IBD/TIPP Economic Optimism Index has three key components. This month, all of the three components declined.
The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, dropped 8.5 points, or 18.0%, to 38.8. 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 2.4 points, or 4.4%, to 52.2.
Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working fell 4.4 points, or 11.0%, to reach 35.5.
“Americans across-the-board think that the economic outlook is grim. The big slide in our economic outlook sub-index perhaps signals a turning point and an impending entry into a recession. This month sixty percent believe that the economy is in a recession,” said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD’s polling partner.
“Given the spate of tax hikes hitting Americans and the cynical manipulation and exaggeration of the impacts of the sequester in Washington, Americans seem to be fed up,” said Terry Jones, associate editor of Investor’s Business Daily. “This could be a political game-changer in the nation’s capital.”
This month, two of the 21 demographic groups that IBD/TIPP tracks were above 50 on the Economic Optimism Index. One group improved and 20 declined.
On the Economic Outlook component, two of the 21 groups that IBD/TIPP tracks scored in optimistic territory. All 21 groups declined.
On the Personal Financial component, 13 of the 21 of the groups IBD/TIPP tracks scored in optimistic territory. Three groups improved on the component and 17 declined. One group did not change.
On the Federal Policies component, two of the 21 demographic groups tracked were above 50. Three groups advanced on the component and 18 declined.
SOURCE: TechnoMetrica Market Intelligence and Investors Business Daily
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