The IBD/TIPP Economic Optimism Index, a leading measure of consumer confidence, declined 0.7 points, or 1.6%, from 44.7 in January to 44.0 in February. In September of last year, the index fell below 50.0, defined as the pessimistic zone, and has remained there for seven months in a row.
Confidence in February is 26% 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 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.