Economic Confidence Collapses As A Flood Of Negatives Predicts A Bad Patch

Economic Confidence Collapses As A Flood Of Negatives Predicts A Bad Patch

After an eight-month spell in the positive zone, economic confidence plummets in September.

Raghavan Mayur

The IBD/TIPP Economic Optimism Index, a leading measure of consumer confidence, declined 5.1 points or 9.5%, from 53.6 in August to 48.5 in September.

After eight consecutive months in the positive territory, the index entered the negative territory.

Confidence in September is 18.9% below its pre-pandemic level of 59.8 in February 2020.

The IBD/TIPP Economic Optimism Index is the first monthly measure of consumer confidence.  It accurately predicts monthly changes in sentiment in other well-known surveys conducted by The Conference Board and the University of Michigan.

Consumer spending drives two-thirds of the economy.  Optimistic consumers spend money on automobiles, home improvements, new homes, and other large-ticket items.

The TIPP Economic Optimism Index is the most well-known of our TIPP indexes. Investor's Business Daily publishes the IBD/TIPP economic optimism index every month.

Multiple factors are behind the collapse of the index and its components.