Economic Confidence Slips in May, As President Biden's Tax Plan Squeezes The Wealthy

Economic Confidence Slips in May, As President Biden's Tax Plan Squeezes The Wealthy

The IBD/TIPP Economic Optimism Index slips in May. One reason for the decline is President Biden's tax increases and spending plans, which have eroded the confidence of high-income earners.

Raghavan Mayur

The IBD/TIPP Economic Optimism Index, a leading measure of consumer confidence, dropped slightly after increasing for four consecutive months. Β 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.