The IBD/TIPP Economic Optimism Index, a leading measure of consumer confidence, declined 2.1 points or 3.7% from 56.4 in June to 54.3 in July.
The index's reading of 54.3 keeps it in positive territory for the seventh consecutive month.
The confidence in June is 9.2% below its pre-pandemic level of Feb 2020.
The IBD/TIPP Economic Optimism Index is the first monthly measure of consumer confidence. It accurately predicts monthly changes in sentiment 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 helping to keep the index and its components in the positive zone.
- Over one-half (52%) in our poll say that they are fully vaccinated, and another 14% have had the first shot. 65% have received at least one shot.
- Most states have resumed normal operations, and the country is open with few restrictions. Most employers are calling back employees to attend work at their offices.
- Consumer perception has shifted significantly, and Americans are generally optimistic about putting the pandemic behind them.
On the negative side, 78 percent of Americans are concerned about possible inflation in the coming months. Price increases in energy, food, and groceries can cause a perceptual shift, causing consumers to cut back on their spending.
TIPP Economic Optimism Index
This flagship Index has three equally weighted components. For the index and its components, a reading above 50.0 signals optimism, and below 50.0 indicates pessimism.
In July, two of the three index components declined.
The Six-Month Economic Outlook, a measure of how consumers feel about the economy's prospects in the next six months, declined sharply by 8.6%, dropping from 55.6 in June to 50.8 in July.
The Personal Financial Outlook, a measure of how Americans feel about their finances in the next six months, improved 4.2%, rising from 57.3 in June to 59.7 this month.
Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, slid 7.1% from its recent high of 56.4 in June to 52.4 in July.
After rising from 32.8 in September 2020 to 73.8 in April 2021, Democrats' confidence slipped to 72.7 over the last three months.
Republicans' confidence has been bouncing between 35.0 and 40.0 since March, while independents' confidence has been bouncing between 45.0 and 50.0.
Comparing a measure's short-term average to its long-term average is one way to detect its underlying momentum. For example, if the 3-month average is higher than the 6-month average, the indicator is bullish. The same holds if the 6-month average exceeds the 12-month average.
On the plus side, despite the index's drop in July, the three-month averages of the economic confidence index and its components are always higher than their six-month averages.
Except for personal financial outlook, the readings in July are lower than their three-month moving averages.
As a result, the data paints a mixed picture of momentum.
The number of groups in the positive zone indicates the breadth of optimism.
This month, 14 of the 21 demographic groups we track — such as age, income, education, and race — are above 50.0, indicating a positive reading on the Economic Optimism Index.
We've seen a steady improvement over the last few months, from 8 groups in the positive zone in December 2020 to 18 groups in June, declining to 14 groups in July. June was the recent peak when it had the highest number of groups above 50 since the pandemic began in March 2020.
Seven groups increased in confidence in July compared to 16 in June.
The share of Americans who believe we are in a recession remained at 40% in July, unchanged from June.
And those who believed the economy was improving dropped slightly in July by 2-points after a slight increase in June.
On the plus side, most states are open for business, and lockdowns have become a thing of the past. The employment situation is likely to improve as the economy reopens. The job market is improving as well, with more businesses returning to full capacity.
The nation is approaching its vaccination goals as more and more Americans are immunized.
On the negative side, rising energy, food, and grocery prices are a wildcard.
President Biden must postpone tax increases until the new economy gains traction.
On balance, the overall picture is encouraging.
TIPP polled 1,424 adults nationwide from June 28 to July 1 via an online survey of adults 18 and older.
The Japanese government on Wednesday compiled a new cybersecurity strategy for the next three years.
Chief Cabinet Secretary Katsunobu Kato, who heads a special task force on cybersecurity strategies, ordered members at its meeting to "enhance defense, deterrence and assessment capabilities and strengthen cooperation among relevant bodies to protect security interests."
He also urged them to quickly respond when abnormal activities in cyberspace are detected during the Tokyo Olympic and Paralympic Games starting July 23.
China criticized Japan's move, saying the new strategy has disregarded basic facts and maliciously exaggerated threats from neighboring countries.
The strategy, which will replace the current one adopted in July 2018, calls for enhancing deterrence through the Japan-U.S. alliance by holding joint exercises of the Japanese Self-Defense Forces and U.S. forces.
Uyghur groups around the world have held protests to mark the 12th anniversary of a violent crackdown on Uyghurs by Chinese authorities in the capital of the Xinjiang Uyghur Autonomous Region (XUAR).
According to China's official figures, 200 people were killed, and 1,700 were injured in the three-day rampage of violence that began on July 5, 2009, in Urumqi between ethnic minority Uyghurs and Han Chinese. However, Uyghur rights groups claim the numbers are much higher.
On the anniversary of the violent unrest in Urumqi, more than 200 Uyghurs, including many young people who came to the United States as children, held an anti-China protest in Washington, D.C.
On Tuesday, U.S. Secretary of State Antony Blinken met via videoconference with seven Uyghur internment camp survivors, advocates, and relatives of people detained in the XUAR to hear directly from them about abuses against the minority group.
The Uyghur Japanese Association organized a protest in Shinjuku, a central ward of Tokyo, with the participation of Uyghurs living in Japan and Japanese citizens, Mongolians, and Hong Kong residents.
The possibility of conflict is increasing under the Tsai administration, the party said, touting its policy of engaging in cross-strait talks on an equal footing.
President Tsai Ing-wen's administration should make a clear statement regarding its stance on the positioning of the nation and cross-strait relations, the Chinese Nationalist Party (KMT) said yesterday.
U.S. National Security Council Coordinator for the Indo-Pacific Kurt Campbell on Tuesday said that while Washington supports a strong unofficial relationship with Taiwan, it does not support the nation's independence.
In a statement yesterday, the KMT said the Democratic Progressive Party (DPP) administration should clearly state its position on the positioning of the nation and cross-strait relations and avoid intensifying tensions in the region.
The Tsai administration should oppose any intrusions by force and welcome any measures conducive to regional stability while insisting that the sovereignty and related rights and interests of the Republic of China not be violated, the KMT said.
A quarter of the U.K.'s homes sit above abandoned coal mines, long since flooded with water. Now, the mines are being put to a new, zero-carbon use.
The U.K. has committed itself to net-zero greenhouse gas emissions by 2050, with much focus on the nation's heating needs (which account for around half of total energy usage).
To help meet the country's sweeping carbon-reduction target, the Coal Authority is exploring the feasibility of some 70 mine water heating projects across the U.K.
It is estimated that around a quarter of the U.K.'s population lives above abandoned coal mines, and that flooded shafts contain around 2.2 million GWh of heat, with the potential to store more.
Yet, while there's mounting evidence of mine water's energy potential, the idea isn't without issue. Retrofitting houses with the means to tap into a geothermal district heating network isn't cheap, and new builds aren't often sited next to derelict collieries.
Sign in or become a tippinsights member to join the conversation.
Just enter your email below to get a log in link.