The IBD/TIPP Economic Optimism Index, a leading measure of consumer confidence, declined 1.7 points or 3.6%, from 48.5 in September to 46.8 in October. The current drop follows a steep 5.1-point decline in September.
After eight consecutive months in the positive territory, the index entered the negative territory in September.
Confidence in October is 21.7% 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.