The RealClearMarkets/TIPP Economic Optimism Index, a leading gauge of consumer sentiment, rose by 13.4% in November to 53.2, reaching its highest level in 39 months, since August 2021 (previous high: 53.6). The index had been in negative territory for 38 consecutive months, starting in September 2021, and broke out decisively in November after President Donald Trump's historic return as the 47th President.
November’s reading of 53.2 is 8.3% higher than its historical average 49.1.
Optimism among investors gained 3.4% from 55.9 in October to 57.8 in November, while it increased by 19.4% among non-investors, from 42.3 in October to 50.5 in November.
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.
RCM/TIPP surveyed 1,436 adults for the November index from November 7 to November 8, after it was confirmed that Donald Trump won the election to become the 47th President. 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 below 50.0 indicates pessimism. 50 is neutral.
The RCM/TIPP Economic Optimism Index has three key components. In November, all of the three components improved.
- The Six-Month Economic Outlook, which measures how consumers perceive the economy's prospects in the next six months, improved from 47.3 in October to 55.9 in November, breaking into positive territory for the first time in 39 months with an 18.2% gain. This component had remained below 50.0 in pessimistic territory from September 2021 to October 2024. In October 2023, it posted a reading of 28.7, its lowest since the index debuted in February 2001.
RCM/TIPP also releases our companion index, known as the RCM/TIPP Financial-Related Stress Index, the only metric to track the financial stress felt by Americans monthly.
The index improved 0.3 points, or 1.3%, from 67.8 in October (its highest reading for 2024) to 67.5 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. 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’s historical average since December 2007 stands at 60.2. November's reading of 67.5 surpasses this historical average by 12.0%, indicating that Americans are experiencing approximately 12% higher financial stress levels than usual.
Notably, the index peaked at 70.5 in October 2023, marking its highest reading since December 2008 (71.0). Since then, it has declined for the better, reaching 67.5 in November.
“While politicians and presidents can't create prosperity, they can certainly remove the barriers to the people who create prosperity. The surge in positive sentiment seems to signal a voter belief that crucial barriers are about to be shrunken to the betterment of the productive. If sentiment is at least somewhat a look into the future, it can be said that what unfolds in the future will be fascinating,” said John Tamny, the editor of RealClearMarkets.
“Americans' economic confidence soared in November following the election of Donald Trump as the 47th President. The optimism index broke out of negative territory for the first time after 38 months, dating back to September 2021. The new president has his job cut out for him: 79% of Americans are worried about inflation, and another 75% are concerned about a slowdown in the next 12 months," said Raghavan Mayur, president of TechnoMetrica, who directed the survey. "Financial stress eased slightly in November, yet inflation, food prices, gasoline prices, and government spending continue to threaten the U.S. economy.”
Economic Optimism Index Breakdown
This month, 18 of the 21 demographic groups we track, including age, gender, race, and education, are in positive territory above 50 on the Economic Optimism Index. For comparison, there were eight in October, seven in September, and three in August. Eighteen groups improved on the index, compared to 14 in October, 17 in September, and 12 in August.
For the Six-Month Economic Outlook component, only 19 of the 21 groups that RCM/TIPP tracks scored in optimistic territory, compared to seven in October, five in September, and two in August. Economic Outlook sentiment improved for 18 of the 21 groups, compared to 16 in October, 16 in September, and 16 in August.
For the Personal Financial component, 20 of the 21 groups that RCM/TIPP tracks were optimistic compared to 17 in October, 14 in September, and 13 in August. Eighteen groups rose compared to 12 in October, 14 in September, and nine in August.
For the Federal Policies component, only one of the 21 groups are above 50.0, compared to three in October, three in September, and one in August. Sixteen groups rose compared to Eight in October, 16 in September, and four 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
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 today.
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