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IBD/TIPP Recovers From Historic Low

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Investor's Business Daily/ TechnoMatrica Institute of Policy and Politics economic optimism index rose 4.1 points, or 11.5%, to 39.9 for September, recovering from its historic low. No expectations were published for this month's release. This followed a historically low reading of 35.8 in August. IBD/TPP began tracking economic optimism in February 2001. The index is 4.7 points below its 12-month average of 44.6 and 4.5 points below its reading of 44.4 in December 2007 when the economy entered into recession, and 10.3 points below its all-time average of 50.2.

The IBD/TIPP economic optimism index has three key components, all of which improved in September. The Six-Month Economic Outlook is a measure of how consumers feel about the economy's prospects in the next six months. It increased 5.2 points, or 16.4%, to 36.9. The Personal Financial Outlook measures how Americans feel about their own finances in the next six months, and improved 4.8 points, or 10.3%, to climb to 51.6. The last sub-index, Confidence in Federal Economic Policies, is a proprietary IBD/TIPP measure of views on how government economic policies are working. It gained 2.5 points, or 8.7%, to reach 31.3.

USD/JPY experienced a small gain to 76.88 following the release. However, consumer confidence is still fragile and could possibly deteriorate if global growth does in fact stall. Though the index improved in September, one month's increase should not be interpreted as a recovery taking hold. American's optimism will return when they are convinced that government policies will let private businesses expand again, creating more jobs and raising incomes, which will spur end demand.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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