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Economic optimism falls. Are 'fiscal cliff' worries to blame?

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The Economic Optimism Index stands at 45.1 this month, down from 48.6 in November and 54 in October. A reading below 50 reflects a pessimistic mood.

Among Republicans, economic optimism stands at a level of 23.7, compared with 42.3 for independents and 65.6 for Democrats.

"The Republican point of view is that America is not heading the right direction" on economic affairs, says Raghavan Mayur, president of TechnoMetrica Market Intelligence, which conducts the TIPP poll for the Monitor and for Investors Business Daily. "They are very worried about the debt."

Other indexes of the economic outlook have given mixed signals lately. The index of consumer confidence by the Conference Board, a business-oriented research and reporting service, rose in November. But a Reuters/University of Michigan index of consumer sentiment rose only slightly during that month, and recently fell in a December reading. Economists interpreted the drop as partly related to fiscal-cliff worries.

Other factors can strongly affect confidence or optimism in all these polls, including slow-but-steady improvement in the job market and volatile gas-pump prices.

When gauges of consumer confidence are released, politics is often off the radar as an explanation of American sentiment. Yet the TIPP poll has shown, over time, that political views can color people's perceptions of the economy.

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