Headline Index Rises to 46.8 as All Three Components Advance; Investors Pull 25.1 Points Ahead of Non-Investors, the Widest Gap Since the Index Began in 2001
Consumer sentiment improved for a second straight month in October as the RealClearMarkets/TIPP Economic Optimism Index, the first monthly reading of U.S. consumer confidence, rose to 46.8 from 45.6 in September, a 1.2-point (2.6%) gain. The index reached its highest level since March, and all three of its components advanced. But the improvement was again concentrated among investors and higher-income households, while non-investors and Americans earning under $75,000 lost ground.
The index has now remained below the neutral 50 mark for fourteen consecutive months, keeping the nation in what we classify as the pessimism zone.
October's reading is 4.5% below the 309-month historical average of 49.0, indicating that even after two consecutive monthly gains, economic optimism remains below its long-term norm.
Investor confidence rose to 62.3 from 61.5 in September, its highest reading since September 2025 and a fourth consecutive month above the neutral 50 mark, while non-investor optimism fell to 37.2 from 37.9, its lowest since April 2024. The confidence gap widened from 23.6 to 25.1 points, the widest separation between the two groups since the index began in February 2001, surpassing the previous record of 24.8 points set in March 2023.
The RCM/TIPP Economic Optimism Index has a strong track record of anticipating the consumer confidence indicators later released by the University of Michigan and The Conference Board. From February 2001 to October 2023, TIPP released this index monthly in collaboration with its former sponsor and media partner, Investor's Business Daily.
RCM/TIPP surveyed 1,488 adults for the October index from September 29 to October 1. The online survey was conducted using TIPP's panel network. The margin of error is ±2.9 percentage points.
The index is measured on a scale from 0 to 100. Readings above 50 indicate optimism, while those below 50 signal pessimism. A score of 50 is neutral.
The RCM/TIPP Economic Optimism Index has three key components. In October, all three rose, and each reached its highest level since March: the forward-looking Six-Month Outlook extended September's rebound, the Personal Financial Outlook resumed its climb, and confidence in federal economic policies advanced for a fifth straight month.
- The Six-Month Economic Outlook, which measures how consumers perceive the economy's prospects in the next six months, rose 3.4%, from 41.3 in September to 42.7 in October, a second consecutive gain and its highest reading since March.
- The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, rose 1.3%, from 52.7 in September to 53.4 in October, its highest reading since March and a 28th consecutive month above the neutral 50 line.
- Confidence in Federal Economic Policies, a proprietary RCM/TIPP measure of views on the effectiveness of government economic policies, rose 3.5%, from 42.9 in September to 44.4 in October, a fifth consecutive monthly gain and its highest reading since March.
RCM/TIPP also releases a companion measure, the Financial-Related Stress Index, the only monthly metric tracking Americans' financial stress. The index declined 0.3%, from 64.7 in September to 64.5 in October. The improvement was narrow: most of it came from 18- to 24-year-olds, and stress actually rose for 13 of the 21 demographic groups we track, eased for seven, and was unchanged for one.
The higher the number, the more stress. Readings above 50 signal increased stress, while those below 50 indicate lower stress. A reading of 50 is considered neutral. For context, the last time the index posted below 50.0 was before the onset of the pandemic in February 2020, when it stood at 48.1.
The index has averaged 60.6 since December 2007. October's reading of 64.5 exceeds the long-term average by 6.4%, signaling that financial stress remains well above its historical norm.
“It's easy to forget that in the United States, our times of relative pessimism would power abundant optimism anywhere else. Said another way, relative to the rest of the world, the U.S. was booming during the Great Depression and is doing so in an exponentially greater fashion today. The challenge is one of expectations. Americans produce in herculean fashion, and expect upward-sloping growth at all times. My view is that the pessimism of today can be found in the previous assertion,” said John Tamny, the editor of RealClearMarkets.
“Every measure of optimism improved in October, but the divide over who is feeling it has never been wider,” said Raghavan Mayur, president of TechnoMetrica. “The index rose 1.2 points to 46.8, its best reading since March, and all three components moved up together. Yet investor optimism climbed to 62.3 while non-investors slipped to 37.2, a 25.1-point gap that is the widest we have recorded since we began tracking in 2001. Households earning $75,000 or more jumped six points; every income group below them fell. Financial stress dipped only slightly and remains well above its long-term norm. Americans with a stake in the markets are growing more confident by the month, and the rest are being left further behind.”
Economic Optimism Index Breakdown
This month, seven of the 21 demographic groups tracked by RCM/TIPP, including age, gender, and income, are in positive territory, with scores above 50 on the Economic Optimism Index. For comparison, there were seven in September, five in August, and seven in July. Twelve groups improved on the index, compared to thirteen in September, eight in August, and seventeen in July.
For the Six-Month Economic Outlook component, six of the 21 groups tracked by RCM/TIPP scored in optimistic territory, compared to five in September, one in August, and three in July. Economic Outlook sentiment improved for twelve groups, compared to fifteen in September, four in August, and all 21 in July.
For the Personal Financial component, eleven of the 21 groups tracked by RCM/TIPP were optimistic, compared to eleven in September, thirteen in August, and thirteen in July. Thirteen groups rose compared to nine in September, ten in August, and sixteen in July.
For the Federal Policies component, six of the 21 groups exceeded 50.0, compared to five in September, four in August, and four in July. Thirteen groups rose compared to thirteen in September, eleven in August, and fifteen in July.
About TechnoMetrica/TIPP
TIPP is the polling unit of TechnoMetrica, a nationally renowned survey research and market research firm dedicated to providing clients with expert data-driven analysis to facilitate informed decision-making in their businesses. The TIPP Poll is considered the gold standard survey, having the unique distinction of being the most accurate presidential poll in the past six election cycles. The tippinsights unit provides editorials and commentaries on national and international issues, often appearing on the RealClearPolitics website.
About RealClearMarkets
RealClearMarkets (RCM) is a one-stop shop for market-related news, analysis, and commentary. RealClearMarkets collects and publishes business, finance, and economic content from across the ideological spectrum. Site features include Market Data, Off the Street Blogs, Quotes, Research Reports, Videos, Topics, and Facts & Fallacies.
RealClearMarkets falls underneath the umbrella of RealClear Media Group's (RCMG) brands, sites that span a spectrum of passions and interests. Visit realclearmediagroup.com.
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