The IBD/TIPP Economic Optimism Index gained 0.2 points, or 0.4% in March, posting a reading of 45.1 vs. 44.9 in February. The index is 0.4 points above its 12-month average of 44.7, 0.7 points above its reading of 44.4 in December 2007 when the economy entered the recession, and 4.2 points below its all-time average of 49.3.

 Note: Index readings above 50 indicate optimism; below 50 indicate pessimism.

The IBD/TIPP Economic Optimism Index has a good track record of foreshadowing the confidence indicators put out later each month by the University of Michigan and The Conference Board.  IBD/TIPP conducted the national poll of 855 adults from February 22 to February 26. The margin of error is +/-3.4 percentage points.

The IBD/TIPP Economic Optimism Index has three key components. This month, two of the three components increased.

     •The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, declined 1.0 point, or 2.3%, to 42.8. The sub-index was 32.1 when the economy entered the last recession in December 2007.

     •The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, gained 0.3 points, or 0.6%, to 54.4.

     •Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, improved 1.4 points, or 3.8%, to 38.2.

“The economy and jobs continue to be the top issues on Americans’ minds,” said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD's polling partner. “The job situation continues to weaken confidence, with 27% of households having at least one person looking for a full-time job. Fifty-six percent think that the U.S. is still in a recession. Also, 54% feel the economy is not improving, while just 43% believe it is.”

The Breakdown 

This month, five of the 21 demographic groups that IBD/TIPP tracks were above 50 on the Economic Optimism Index. Twelve groups improved and nine declined.
 
On the Economic Outlook component, four of the 21 groups that IBD/TIPP tracks scored in optimistic territory. Nine groups improved and twelve declined.
 
On the Personal Financial component, sixteen of the 21 groups IBD/TIPP tracks scored in optimistic territory. Twelve groups increased and nine decreased.  
 
On the Federal Policies component, three of the 21 demographic groups tracked were above 50.  Fourteen groups advanced on the component and six declined. One group did not change.