US December IBD/TIPP Consumer Confidence Index Strengthens To 55.6

The US IBD/TIPP Economic Optimism index rose to 55.6 for January from 54.8 in December.

The index is 6.5 points above its 12-month average and also 6.5 points above the long-term average. The latest reading was also the highest since before the financial crisis.

There was a further increase in the Economic Policy index to 48.5 from 48.3 previously.

There was also a strong gain in the Personal Financial Outlook component to 62.3 from 59.8 the previous month. This particular component could be important in suggesting a stronger short-term outlook in the economy, although there is still a risk that the reality will prove to be disappointing.

There was a small decline in the Six-Month Economic Outlook index to 56.0 from 56.3.

The data overall continues to indicate optimism that President-elect Trump will be able to deliver on his promises to boost employment and strengthen the US growth rate.

According to TIPP, the commitment of US companies to boost US production has increased confidence, while the US equity indices have hit record highs, which will also tend to improve sentiment in the short term.

The dollar continued to gain support following the data with EUR/USD trading at session lows near 1.0470, while USD/JPY advanced to 116.75. US Treasuries moved into negative territory with markets looking for bullish rhetoric from Trump in his press conference, while equity futures were slightly higher.

Tim is a contributing author to He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.