Consumer sentiment increased in August, as the RealClearMarkets/TIPP Economic Optimism Index rose from 48.6 in July to 50.9, a 4.7% gain. After peaking at a 40-month high of 54.0 in December, the index eased to 51.9 in January and 52.0 in February before slipping below the crucial 50.0 benchmark in March. August’s reading breaks a five-month spell in the pessimistic territory.
The Economic Optimism Index’s August reading of 50.9 is 3.5% above its 295-month historical average of 49.2.
Investor confidence rose by 13.2% (7.6 points) to 65.1, while non-investor confidence edged up by 0.5% (0.2 points) to 43.5. The August reading for investors marks a 48-month high, the strongest since August 2021. The confidence gap between investors and non-investors is 21.6 points.
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 1,362 adults for the August index from July 30 to August 1. The online survey used TIPP's network of panels to obtain the sample.
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 August, all of them improved.
- The Six-Month Economic Outlook, which measures how consumers perceive the economy's prospects in the next six months, gained 3.6%, from 44.5 in July to 46.1 in August.
- The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, improved by 3.1% from its previous reading of 54.0 in July to 55.7 this month.
- Confidence in Federal Economic Policies, a proprietary RCM/TIPP measure of views on the effectiveness of government economic policies, increased from 47.3 in July to 50.8 this month, reflecting a 7.4% gain. This component crossed above the neutral 50.0 mark for the first time, ending a 47-month streak in pessimistic territory that began in September 2021.
RCM/TIPP also releases a companion measure, the Financial-Related Stress Index, the only monthly metric tracking Americans’ financial stress.
The index rose 4.4 points (7.2%) from 61.2 in July to 65.6 in August, echoing heightened financial stress among Americans.
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 60.4 since December 2007. August’s reading of 65.6 exceeds this by 8.6%, signaling heightened financial stress relative to the long-term average.
"It's a question that economists and pundits haven't been able to answer: why, amid economic errors that are erroneous to economic schools of thought of myriad stripes, are investors still confident? Do they see the courts arresting the mistakes, or is the global economy so interconnected in modern times that no number of barriers erected to free exchange can stop the undeniable progress?" said John Tamny, the editor of RealClearMarkets.
“Americans’ economic confidence brightened significantly in August, with investor sentiment reaching a 48-month high,” said Raghavan Mayur, president of TechnoMetrica, who directed the survey. “However, concerns about inflation and the impact of tariffs remain elevated, with food prices standing out as the top economic worry. Counterintuitively, financial stress rose sharply during the month.”
Economic Optimism Index Breakdown
This month, 10 of the 21 demographic groups tracked by RCM/TIPP, including age, gender, race, and education, are in positive territory, with scores above 50 on the Economic Optimism Index. For comparison, there were six in July, seven in June, and eight in May. Twenty groups improved on the index, compared to 10 in July, 18 in June, and five in May.
For the Six-Month Economic Outlook component, five of the 21 groups tracked by RCM/TIPP scored in optimistic territory, compared to five in July, five in June, and five in May. Economic Outlook sentiment improved for all 21 groups, compared to nine in July, 17 in June, and nine in May.
For the Personal Financial component, 17 of the 21 groups tracked by RCM/TIPP were optimistic, compared to 16 in July,13 in June, and 12 in May. Twenty groups rose compared to nine in July, 16 in June, and 10 in May.
For the Federal Policies component, eight of the 21 groups are above 50.0, compared to six in July, eight in June, and seven in May. All twenty-one groups rose compared to six in July, 15 in June, and 15 in May.
Release schedule for the balance of 2025
- Sep 2025: Tuesday, September 2
- Oct 2025: Tuesday, October 7
- Nov 2025: Tuesday, November 4
- Dec 2025: 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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