In recent days, headlines have screamed of economic doom. Yet our RealClearMarkets/TIPP survey tells a more grounded story: consumer confidence weakened, but there’s no sign of panic in the data.
The RealClearMarkets/TIPP Economic Optimism Index, a key gauge of consumer sentiment, declined from 49.1 in April to 47.9 in May, representing a 2.4% decrease. After hitting a 40-month high of 54.0 in December, the index eased to 51.9 in January and 52.0 in February before falling below the 50.0 threshold in March. May's reading of 47.9 marks the third consecutive month in the pessimistic zone. Since President Trump’s re-election in November 2024, the index remained optimistic until February.
May’s reading of 47.9 is 2.6% lower than its historical average of 49.2.
Investor confidence slipped slightly by 0.8% (0.5 points) to 60.4, while non-investor confidence dropped by 1.7 points (4.2%) to 40.9.
The RCM/TIPP Economic Optimism Index has a strong track record of predicting the 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 1,400 adults for the May index from April 30 to May 2. The online survey utilized TIPP's network of panels to obtain the sample.
The index ranges 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 May, two of them declined.
- The Six-Month Economic Outlook, which measures how consumers perceive the economy's prospects in the next six months, declined by 3.1%, from 45.0 in April to 43.6 in May.
RCM/TIPP also releases its companion index, the RCM/TIPP Financial-Related Stress Index, the only metric tracking the financial stress Americans feel monthly.
The index climbed 3.0 points (4.7%) from 63.7 in April to 66.7 in May, reflecting increased financial stress among Americans.
The higher the number, the more stress. Readings above 50 signal increased stress, while those below 50 indicate lower stress; 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 60.3 since December 2007. May’s reading of 66.7 exceeds this by 10.5%, signaling heightened financial stress relative to the long-term average.
Notably, the index peaked at 70.5 in October 2023, marking its highest reading since December 2008 (71.0). Since then, it has improved, reaching 66.7 in May 2025.
“An economy isn't a blob, it's individuals. And the fierce individualism that defines the U.S. means that the people who make it up have the energy and talent to work around the kind of barriers that might hold the typical person down. Hopefully that explains a better than expected RCM/TIPP number, that Americans will persist and prosper no matter the economic errors foisted upon them,” said John Tamny, the editor of RealClearMarkets.
“Americans' economic confidence weakened in May. However, it did not nosedive and the data showed no panic. Fears of inflation, the impact of tariffs, and an economic slowdown persist. Food prices are the #1 economic concern for Americans," said Raghavan Mayur, president of TechnoMetrica, who directed the survey. "Financial stress increased significantly in May.”
Economic Optimism Index Breakdown
This month, eight of the 21 demographic groups we track, including age, gender, race, and education, are in positive territory, with scores above 50 on the Economic Optimism Index. For comparison, there were nine in April, nine in March, and 13 in February. Five groups improved on the index, compared to nine in April, five in March, and 11 in February.
For the Six-Month Economic Outlook component, five of the 21 groups that RCM/TIPP tracks scored in optimistic territory, compared to five in April, five in March, and 10 in February. Economic Outlook sentiment improved for nine of the 21 groups, compared to six in April, two in March, and eight in February.
For the Personal Financial component, 12 of the 21 groups tracked by RCM/TIPP were optimistic, compared to 18 in April, 17 in March, and 19 in February. Ten groups rose compared to 11 in April, 10 in March, and one in February.
For the Federal Policies component, seven of the 21 groups are above 50.0, compared to five in April, six in March, and seven in February. Fifteen groups rose compared to five in April, nine in March, and 18 in February.
Release Schedule For Balance Of 2025
- 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
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