The RealClearMarkets/TIPP Economic Optimism Index, a leading national survey of consumer sentiment, gained 22.6% to reach 44.5 in November. Last month, the index had fallen to its twelve-year low of 36.3. The index has now been in negative territory for 26 consecutive months.
The RCM/TIPP Economic Optimism Index has established a strong track record of foreshadowing the confidence indicators issued later each month 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.
For the November index, RCM/TIPP surveyed 1,400 adults from November 1–3. The online survey utilized TIPP’s network of panels to obtain the sample.
The index and its components range from 0 to 100. A reading above 50.0 signals optimism and a reading below 50.0 indicates pessimism. 50 is neutral.
The RCM/TIPP Economic Optimism Index has three key components. In November, all three improved.
- The Six-Month Economic Outlook, which measures how consumers perceive the economy's prospects in the next six months, rebounded from 28.7 in October to 39.1 in November, marking a 36.2% increase. October saw the lowest reading for this component since the index debuted in February 2001.
- The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, increased by 13.2% from its previous reading of 46.8 to 53.0 this month. This component has now returned to positive territory.
- Confidence in Federal Economic Policies, a proprietary RCM/TIPP measure of views on the effectiveness of government economic policies, increased from 33.5 in October to 41.5, reflecting a 23.9% change. Last month's reading of 33.5 marked the lowest point for this component since October 2013 (31.2).
Economic optimism among investors rose 32% from 44.0 in October to 58.1 in November, while the increase was much smaller among non-investors, who rose 10% from 32.9 in October to 36.2 in November.
RCM/TIPP also releases our companion index, called the RCM/TIPP Financial-Related Stress Index, the only metric to track the financial stress felt by Americans monthly
The Financial-Related Stress Index edged lower in November from its October peak, which marked the highest reading on this index since December 2008, when it posted 71.0. The stress index decreased by 2%, dropping from 70.5 in October to 69.1 in November. The higher the number, the more stress. Readings above 50 signal increased stress, while those below 50 indicate lower stress, with 50 considered neutral. The last time the index posted below 50.0 was before the onset of the pandemic in February 2020 (48.1).
“Americans are experiencing financial stress at historic levels as their incomes have not kept pace with inflation. Only 24% in our survey mention that their wages have kept pace with inflation. All 21 demographic groups we track have reported stress levels above 60.0, indicating a financial epidemic in the nation. While the rebound is welcome, we are still not out of the woods," said John Tamny, the editor of RealClearMarkets. "Inflation, rising food prices, soaring gasoline prices, high interest rates, and the volatile stock market continue to trigger financial stress in Americans.
“The threat of a government shutdown, rising awareness of $33 trillion in national debt, rising interest rates, resumption of student loan payments, and the United Auto Workers’ strike were catalysts that shook Americans’ confidence in October. Resolving the government shutdown temporarily has helped immensely,” said Raghavan Mayur, president of TechnoMetrica, who directed the survey. “Fifty-one percent in the survey think we are in a recession, and 60% believe the economy is not improving.”
Economic Optimism Index Breakdown
This month, only six of the 21 demographic groups we track, including age, gender, race, and education, are in positive territory above 50 on the Economic Optimism Index. In contrast, there was only one such group in October, three in September, and one in August. The increase in positive readings was broad-based, with 20 of the 21 groups improving. In October, no group saw a rise, while in September, 15 did, and in August, six did.
For the Six-Month Economic Outlook component, five of the 21 groups that RCM/TIPP tracks scored in optimistic territory, compared to none in October, three in September, and none in August. Economic Outlook sentiment improved for 20 of the 21 groups, compared to none in October, 14 in September, and nine in August.
For the Personal Financial component, 11 groups that RCM/TIPP tracks were in optimistic territory vs. five in October, 14 in September, and eight in August. Seventeen groups rose after two in October, 19 in September, and eight in July.
For the Federal Policies component, six of the 21 groups were above 50.0 compared to one in October, four in September, and one in August. Twenty groups rose vs. one in October, 10 in September, and five in August.
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 five election cycles. The tippinsights unit provides editorials and commentaries on national and international issues, often appearing on the RealClearPolitics website.
About RealClearMarkets
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