The IBD/TIPP Economic Optimism Index, a leading measure of consumer confidence, dropped slightly after increasing for four consecutive months. The index posted a 3.5% decline slipping from the Pandemic high of 56.4 in April to 54.5 in May.
President Biden's tax increases and spending plans erode high-income earners' confidence, which fell a whopping 9.5 points or 14% from 67.8 in April to 58.3 in May.
Consumer spending drives two-thirds of the economy. Optimistic consumers spend money on automobiles, home improvements, new homes, and other large-ticket items.