The IBD/TIPP Economic Optimism Index, a leading measure of consumer confidence, declined 3.0 points, or 6.8%, from 44.0 in February to 41.0 in March, the lowest since October 2013.
The index had dropped both in January and February. In September of last year, the index fell below 50.0, defined as the pessimistic zone, and has remained there for seven consecutive months.
Confidence in March is 31% below its pre-pandemic level of 59.8, recorded in February 2020.
The IBD/TIPP Economic Optimism Index is the first monthly measure of consumer confidence. It accurately predicts monthly changes in sentiment reflected 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 decline of the index and its components.