The IBD/TIPP Economic Optimism Index, a leading measure of consumer confidence, declined 3.7 points or 7.6%, from 48.4 in December to 44.7 in January. The index fell below 50.0, defined as the pessimistic zone, in September of last year and has remained there for the past five months.
Confidence in January is 25.3% 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.