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 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 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.
The RCM/TIPP Economic Optimism Index is the first monthly measure of consumer confidence. It 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 was elected to become the 47th President. The online survey utilized TIPP’s network of panels to obtain the sample. A more detailed methodology is available here.
RCM/TIPP Economic Optimism Index
The RCM/TIPP Economic Optimism Index has three key components. In November, all 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 (an 18.2% gain) in November, breaking into positive territory for the first time in 39 months . This component had remained below 50.0 (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.
- The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, increased by 13.8% from its previous reading of 53.6 in October to 61.0 this month. Coincidentally, November’s reading is the highest since March 2020 (61.2), the month the pandemic hit the U.S., signaling the expectations of a strong economy under the new president.
- Confidence in Federal Economic Policies, a proprietary RCM/TIPP measure of views on the effectiveness of government economic policies, increased from 39.7 in October to 42.7 this month, reflecting a 7.6% gain. This component has been below 50.0 in the pessimistic territory for 39 consecutive months since September 2021.
Party Dynamics
With Donald Trump’s election as the 47th President, Democrats’ confidence tumbled from 62.9 in October to 43.2 in November, a significant drop of 19.7 points or 31%.
Meanwhile, Republicans’ confidence surged 29.9 points to 64.7 this month, an 86% increase. Since the 2020 presidential election, confidence in the economy had remained in the pessimistic zone for 48 consecutive months.
Independent voters’ confidence has remained in pessimistic territory for 56 months, beginning in April 2020, shortly after the onset of the pandemic. In November, independents’ confidence rose by 8.6 points, or 20%, reaching 51.3 on the Index — their first positive reading in nearly five years.
Investor Confidence
Respondents are considered “investors” if they currently have at least $10,000 invested in the stock market, either personally or jointly with a spouse, either directly or through a retirement plan. Thirty percent of respondents met this criterion, and 64% were classified as non-investors. We could not ascertain the status of six percent of respondents.
Investor optimism rose by 3.4%, climbing from 55.9 in October to 57.8 in November, while non-investors saw a bigger increase of 19.4%, from 42.3 to 50.5. The economic optimism gap between investors and non-investors narrowed to 7.3 points in November, down from 13.6 in October, 10.4 in September, and 11.7 in August.
Momentum
Comparing a measure’s short-term average to its long-term average is one way to detect its underlying momentum. For example, if the 3-month average is higher than the 6-month average, the indicator is bullish. If the 6-month average exceeds the 12-month average, the same holds.
In November, the Economic Optimism Index and its three components are higher or the same as their respective three-month moving averages, indicating a positive trend. Notice the stair-step pattern confirming the trend.
Demographic Analysis
The number of groups in the positive zone indicates the breadth of optimism in American society. This month, demographic groups in the optimism zone jumped from eight in October to 18, indicating widespread optimism. The three pessimistic groups are those aged 65+ (48.7), Females (49.4), and Democrats (43.2).
The number of groups in the positive zone oscillated between two and five in 2024. Only three groups were in the positive zone in August, increasing to seven in September and eight in October.
Eighteen groups improved on the index, compared to 14 in October, 17 in September, and 12 in August.
Economic optimism levels for 19 of 21 demographic groups are higher in November 2024 than the historical average of the past 286 months.
Inflation
The survey showed that 79% are worried about inflation. One-half (45%) are very concerned, and another 34% are somewhat concerned.
Americans continue to suffer because real wages have not increased, despite the CPI rate falling from a 40-year high of 9.1% in June 2022 to 2.6% in October 2024.
The Federal Reserve believes that long-run inflation of 2%, measured by the annual change in the price index for personal consumption expenditures, is most consistent with its maximum employment and price stability mandate.
Recession
Four in ten (40%) believe we are in a recession, while 31% think we are not. Another 24% are not sure. The share of Americans who believe we are in a recession has dropped from 45% in August to 40% in November.
Further, over one-half (56%) think the U.S. economy is not improving, while 27% believe it is improving.
In November, consumer sentiment surged post-election, raising the RealClearMarkets/TIPP Economic Optimism Index to a 39-month high of 53.2. Gains across personal finance outlook and investor confidence reflect a renewed optimism under the new administration. This uptick points to a broader sense of economic hope, especially among independents and non-investors. However, inflation concerns and lingering recession fears add a note of caution to the improving outlook.
TIPP Picks
Selected articles from tippinsights.com
The Army Is Wasting R&D Dollars On Reducing Greenhouse Gas Emissions – Joel Highfill & Wilson Beaver, The Daily Signal
We’re Already On Track For A $2 Trillion Deficit This Year -Ryan McMaken, Mises Institute
Why Is China’s Atheist Regime Trying To Pick The Next Dalai Lama? – Bryan Burack & Jack Erickson, The Daily Signal
EU Looking At Ramping Up Ukraine Aid – Infographics – TIPP Staff, TIPP Insights
How Lights On Surfboards Could Deter Sharks From Attacking – Infographics – TIPP Staff, TIPP Insights
TIPP Takes
Geopolitics, Geoeconomics, And More
1. Reports That Hamas Office Moved To Turkey Not True, Turkish Source Says – Reuters
A Turkish diplomatic source dismissed reports that Hamas had moved its political office to Turkey from Qatar, adding that members of the Palestinian militant group only occasionally visited the country.
Doha said last week it had told Hamas and Israel it would stall efforts to mediate a Gaza ceasefire and hostage release deal until they show willingness and seriousness. It also said that media reports that it had told Hamas to leave the country were not accurate.
2. EU Ministers Reject Suspending Dialogue With Israel – D.W.
EU foreign ministers rejected a proposal from the bloc’s foreign policy chief, Josep Borrell, to suspend diplomatic dialogue with Israel.
Borrell said such a move would aim to put pressure on the Israeli government after it had ignored several pleas to adhere to international law in the war in the Gaza Strip. Josep Borrell had been a persistent and vocal critic of Israel in his last year in office.
3. Russia Vows ‘Tangible’ Response If U.S. Missiles Used Against Its Territory – BBC
Russia says the use of U.S. long-range missiles by Ukraine will lead to “an appropriate and tangible” response.
Such an attack inside Russian territory “would represent the direct involvement of the United States and its satellites in hostilities against Russia”, a foreign ministry statement said. President Joe Biden approved the use of the missiles on targets in Russia in a major change of U.S. policy – two months before he is due to leave the White House.
4. Russia Claims First Su-57 Fighter Jet Export Contracts – RFA
Russia’s arms exporter Rosoboronexport said it has signed contracts to supply foreign buyers with the fifth-generation combat aircraft Sukhoi Su-57. However, some Western analysts have doubted the advanced combat jet’s capabilities.
Alexander Mikheev, Rosoboronexport’s director general, told journalists at the Zhuhai Airshow in China last week that the company had secured “first contracts” with some “friendly” foreign countries without giving further details.
5. China Rushes To Boost Domestic Chip Supply Ahead Of Trump’s Return – Nikkei Asia
China’s public and private sectors are accelerating efforts to boost domestic production of semiconductors, including cutting-edge devices. The U.S. is only expected to dial up pressure on Beijing in the second Trump administration.
“China’s capacity to supply semiconductor products has significantly improved, and its companies have clearly become more competitive,” said Wang Shijiang, a senior official at the Ministry of Industry and Information Technology, at the China International Semiconductor Expo, or IC China, being held in Beijing.
6. Trump’s Hawkish Cabinet To Face A More Resilient China, Analysts Say – Nikkei Asia
As U.S. President-elect Donald Trump looks to fill his cabinet with outspoken critics of Beijing, he is confronting a potentially tougher rival: a China that has been girding for an intensifying conflict between the powers, even at greater economic cost.
Despite economic woes, Beijing has built up tools to hit back.
7. Top Hong Kong Pro-Democracy Leaders Sentenced To Jail – BBC
Benny Tai and Joshua Wong were among the so-called Hong Kong 47 group of activists and lawmakers involved in a plan to pick opposition candidates for local elections. Tai received 10 years while Wong received more than four years.
Most of the group were found guilty of conspiring to attempt subversion, while two were acquitted. Their trial marked the largest use of the harsh national security law (NSL) which China imposed on Hong Kong shortly after the city’s explosive pro-democracy protests in 2019.
8. EU Widens Sanctions On Iran For Supporting Russia’s War On Ukraine – RFE/RL
The new sanctions include the Islamic Republic of Iran Shipping Lines (IRISL)—which will see its assets frozen—and measures targeting the activities of Iranian ports on the Caspian Sea linked to listed entities and individuals.
He added that European parties were violating international law, including the freedom of navigation and maritime trade, via sanctions.
9. Iran Rejects EU, UK Sanctions On Shipping Line As ‘Unjustified’ – Reuters
New EU and British sanctions are based on false claims of missile transfers to Russia and are “unjustified,” Iran Foreign Ministry spokesperson Esmaeil Baghaei said.
Brussels added the Islamic Republic of Iran Shipping Lines (IRISL) and its director to its list of sanctions on Iran, which it said were a consequence of Tehran’s support of Russia in its war with Ukraine.
10. Nordic Neighbours Release New Advice On Surviving War – BBC
On Monday, millions of Swedes will start receiving copies of a pamphlet advising the population on how to prepare and cope in war or another unexpected crisis.
“In case of crisis or war” has been updated from six years ago because of what the government in Stockholm calls the worsening security situation, which means Russia’s full-scale invasion of Ukraine. The booklet is also twice the size. Neighboring Finland has also just published its own fresh advice online on “preparing for incidents and crises.”
11. N. Korea Sends Trash-Carrying Balloons To S. Korea For 1st Time In 3 Weeks – Yonhap
North Korea again sent balloons carrying trash toward South Korea on Monday, the military here said, resuming its balloon campaign after about a three-week hiatus.
Since late May, North Korea has sent more than 7,000 balloons carrying trash across the border in retaliation against anti-Pyongyang propaganda leaflets sent across the border by activists in the South. Monday’s launch marked the 31st such launch.
12. Semiconductor Stocks At Risk From China Export Restrictions – Barchart.Com
Semiconductor companies, including ASML (ASML) and Applied Materials (AMAT), could face a new round of export restrictions to China. This time, officials seem to be targeting wafer fabrication equipment (WFE) exports.
At the same time Bernstein analyst David Dai noted, “Depending on the specific measures of restriction, another round may not materially impact China’s overall purchase of WFE.” Bernstein suggested that if and when new WFE export restrictions to China are announced, it could create a buying opportunity for these stocks.
13. Billionaires Are Piling Into An Index Fund That Could Soar Up To 1,207% By 2030, Say Wall Street Experts – The Motley Fool
iShares Bitcoin Trust (IBIT) – the leading spot Bitcoin exchange-traded fund (ETF) – has attracted the attention of several notable asset managers, including Israel Englander, David Shaw, and Steven Cohen, in the first six months of 2024.
At the same time, multiple analysts and Wall Street insiders have put a massive long-term price target on Bitcoin (BTC), the underlying asset behind the iShares Bitcoin Trust. Ark Invest’s Cathie Wood says Bitcoin could reach $1 million or more by 2030.
14. Cocoa, Green Tea Might Help Counteract ‘Stress Eating’ Fatty Foods – HealthDay News
A new study says that folks who stress-eat fatty foods like cookies, chips, and ice cream might be able to protect their health with a nice cup of cocoa or green tea.
Researchers found that drinking cocoa that’s high in healthy flavanols along with a fatty meal can counteract some of the impact of fats on the body, particularly the blood vessels. Researchers recommend that people look for minimally processed cocoa powder, or drink green or black tea.
Republished with permission from TIPP Insights
