The RCM/TIPP Financial-Related Stress Index reveals rising financial strain among Americans in January.
The RealClearMarkets/TIPP Economic Optimism Index, a leading gauge of consumer sentiment, dropped by 3.9% in January to 51.9, following a 40-month high in December (54.0). 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 election as the 47th President.
January’s reading of 51.9 is 5.6% higher than its historical average of 49.1.
Investor confidence fell by 6.9% (4.2 points) to 56.9, while non-investor confidence declined marginally by 0.8 points (1.6%) to 49.5.
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 1,424 adults from January 8 to 10 for the January index. 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 January, two of the three components declined, and one advanced.
- The Six-Month Economic Outlook, which measures how consumers perceive the economy's prospects in the next six months, declined by 6.3%, from 55.6 in December to 52.1 in January. In November, the component broke into positive territory with a reading of 55.9 for the first time in 39 months, with an 18.2% gain after remaining below 50.0 in pessimistic territory from September 2021 to October 2024.
The index increased by 4.4 points, or 7.3%, from 60.3 in December to 64.7 in January.
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 60.3. January's reading of 64.7 surpasses this historical average by 7.3%, indicating that Americans are experiencing elevated stress levels.
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 64.7 in January 2025.
“It's easy to forget that an economy is people. So, while the RCM/TIPP Index is numerical, it's a gauge of how the people who comprise an economy see the world around them. Any decline isn't cause for worry as much as it's a call to look into what's changed, and why the change has altered the outlook of people,” said John Tamny, the editor of RealClearMarkets.
“Americans' economic confidence declined in January after soaring in the wake of Donald Trump’s election as the 47th President, with the optimism index reaching a 40-month high in December. However, fears of inflation and a slowdown persist: 82% of Americans are worried about inflation, and 75% are concerned about an economic slowdown in the next 12 months," said Raghavan Mayur, president of TechnoMetrica, who directed the survey. "Financial stress also rose significantly in January.”
Economic Optimism Index Breakdown
This month, 14 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 15 in December, 18 in November, and eight in October. Five groups improved on the index, compared to 10 in December, 18 in November, 14 in October, and 17 in September.
For the Six-Month Economic Outlook component, 13 of the 21 groups that RCM/TIPP tracks scored in optimistic territory, compared to 15 in December, 19 in November, and seven in October. Economic Outlook sentiment improved for four of the 21 groups, compared to nine in December, 18 in November, and 16 in October.
For the Personal Financial component, 20 of the 21 groups that RCM/TIPP tracks were optimistic compared to 19 in December, 20 in November, and 17 in October. Eighteen groups rose compared to three in December, 18 in November, and 12 in October.
For the Federal Policies component, only four of the 21 groups are above 50.0, compared to six in December, one in November, and three in October. Five groups rose compared to 18 in December, 16 in November, and eight in October.
Release Schedule For 2025
- Jan 25: Tuesday, January 14
- Feb 25: Tuesday, February 4
- Mar 25: Tuesday, March 4
- Apr 25: Tuesday, April 1
- May 25: Tuesday, May 6
- Jun 25: Tuesday, June 3
- Jul 25: Tuesday, July 1
- Aug 25: Tuesday, August 5
- Sep 25: Tuesday, September 2
- Oct 25: Tuesday, October 7
- Nov 25: Tuesday, November 4
- Dec 25: Tuesday, December 2
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
Comment
Show comments
Hide Comments
