IBD/TIPP Economic Optimism

The IBD/TIPP Economic Optimism Index is a monthly US sentiment gauge of opinions and expectations, not hard activity. TIPP, the polling unit of TechnoMetrica Market Intelligence, polls US adults nationwide. Investor's Business Daily backed it from February 2001 to October 2023, and RealClearMarkets backs it from November 2023.

It tracks 21 demographic groups and gives the earliest confidence read each month; 50 is neutral, above signals optimism and below signals pessimism. It foreshadows Conference Board and University of Michigan sentiment polls, and Arabic calendars list it under its RCM/TIPP and IBD/TIPP confidence titles.

Responses are usually collected in the 1st week of the month from 1,300-plus US adults by online survey. An earlier phone era polled 900-plus adults with live interviewers on cell and landline. Release usually falls on the 1st Tuesday of the month at 10:00 AM Eastern Time on RealClearMarkets.com, unless the published calendar sets the 2nd Tuesday.

Each release also covers the Presidential Leadership, National Outlook, and Financial Related Stress sister indexes, with 21-group splits and editor commentary. Readings are final with no revisions. The stress gauge reads inverted: over 50 means more stress.

The headline averages 3 equally weighted parts, so each part can pull it over or under 50.

• Six-Month Economic Outlook: outlook for the economy over the next 6 months and the most volatile part.
• Personal Financial Outlook: outlook for personal finances over the next 6 months, often the highest part.
• Confidence in Federal Economic Policies: satisfaction with government economic policy, often the lowest part.

The March 6, 2018 release showed divergence: the headline dipped 1.9% from 56.7 to 55.6 but stayed above 50 for an 18th straight month. Outlook fell 8.0% from 57.5 to 52.9, finances held at 63.8, and policy confidence rose 2.7% from 48.7 to 50.0 after 13 months below 50. The lesson is clear: the headline can stay optimistic while parts move opposite, so readers must check parts, not headline alone. That poll covered 901 adults by live phone interviews from February 22 to March 1, 2018, with a margin of error of +/-3.3 points.

1. Remove non-responses: Ignore "not sure" or "no answer" replies and base shares only on substantive answers.
2. 3-answer score: For better/worse/same questions, use K = 50 + 0.5 x (p(+) minus p(-)), where p(+) is positive share and p(-) is negative share.
3. 4-answer score: For intensity questions, use K = 50 + 0.5 x (p1(+) minus p1(-)) + 0.25 x (p2(+) minus p2(-)). Here p1 is strong share and p2 is moderate share.
4. Headline average: Average the 3 part scores for the headline on a 0 to 100 scale. A 100 means all strongly positive and 0 means all strongly negative.
5. Worked example: 30% better with 40% worse gives 45.0, 35% with 30% worse gives 52.5, and 10% / 25% / 25% / 40% give 35.0. With 52.5 for finances, the headline is (45.0 + 52.5 + 35.0) / 3 = 44.2, below 50 and pessimistic.
6. Weighting: Weight results by age, gender, race, region, and other traits in a proprietary model, with no seasonal adjustment.