Consumer confidence

RECENT NEWS
Financial Times  Aug 14  Comment 
Sales up 1.5% to £125.4m in first half of the year as the housing market picked up and incomes rose
Clusterstock  Aug 14  Comment 
Consumer confidence dropped slightly early this month. The preliminary August reading of the University of Michigan's consumer sentiment index came in at 92.9. Economists had estimated, according to Bloomberg, that the index climbed to 93.5...
WA Business News  Aug 14  Comment 
Anyone wondering why consumer confidence is having trouble rising above an unhappy medium would do well to take a look at the latest average weekly earnings figures.
guardian.co.uk  Aug 12  Comment 
Results ‘very surprising’, says Westpac economist, adding ‘consumers are feeling more relaxed’ because international crises no longer dominating media Consumer confidence has surged, buoyed by continued positive news around house prices...
The Australian  Aug 12  Comment 
Australia has recorded a “surprising” jump in consumer confidence.
Forbes  Aug 10  Comment 
TREX is compelling long-term bet as consumer confidence and home sales improve.
newratings.com  Aug 10  Comment 
BRUSSELS (dpa-AFX) - Japan consumer confidence index for July was released at 1:00 am ET Monday. After the data, the yen changed little against its major rivals. As of 1:01 am ET, the yen was trading at 136.47 against the euro, 192.64...
Daily FX  Aug 7  Comment 
Positive data prints from the world’s largest economy may prop up USD/JPY in the weak ahead. Here’s what to watch.
Cellular News  Aug 7  Comment 
Consumer confidence toward technology spending rose slightly in July and consumer sentiment toward the overall economy decreased slightly, Click here for more.
newratings.com  Aug 6  Comment 
BRUSSELS (dpa-AFX) - Switzerland's State Secretariat for Economic Affairs, or SECO, is scheduled to release its consumer confidence index for July at 1:45 am ET Thursday. The consumer confidence index is expected to decline to -7 in July from...




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Consumer confidence is a term for consumers' level of optimism about the economy. It is used to capture people's perception, rather than the actual state, of the economy. Consumer confidence affects consumption, which accounted for 74% of the US Gross Domestic Product in the first quarter of 2008.[1] This is because people tend to adjust their spending based of expectation of the future. Factors such as changes in employment levels, increase/decrease in gasoline prices, inflation expectations and major events, e.g. terrorist attacks, hurricanes and ending a war, affects consumer confidence. Consumer confidence tends to vary from country to country.

Measures of Consumer Confidence

[[Image:Mich_cc.jpg|right|thumb|450px|University of Michigan Consumer Sentiment Index (Jan 1978- Jan 2008)[2]

Who is affected by changes in consumer confidence

Consumer confidence affects consumption, which accounted for 74% of the US Gross Domestic Product in the first quarter of 2008.[3] This is because people tend to adjust their spending based of expectation of the future. Lower consumer confidence, leads to lower overall spending and vice versa. Economists have concluded that spending on durable goods, such as cars and computers, is affected more than spending on non-durable goods, such as food -- since, consumers tend to put off the high budget items till they feel comfortable about purchasing them.[4] High consumer confidence bodes well for almost all types of businesses.

The type of businesses that are affected most by changes in consumer confidence are:

The type of businesses that are affected least by changes in consumer confidence are:

References

  1. Bureau of Economic analysis, Retrieved 7/30/2008
  2. Data from University of Michigan, retrieved 7/30/2008</ref two studies: The US Consumer Confidencitions for the next six months, current employment conditions, employment conditions for the next six m The University of Michigan Consumer Sentiment Index, calculated and published by the University of Michigan each month, is measured by conducting a phone survey of at least 500 households. The survey contains 50 questions focusing on three broad areas: personal finances, business conditions, and buying conditionber of 1964.<ref>[http://www.sca.isr.umich.edu/documents.php?c=i University of Michigan Consumer Sentiment Index: Survey Information, retrieved 07/25/08]</li> <li id="_note-2">[[#_ref-2|↑]] [http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=5&FirstYear=2007&LastYear=2008&Freq=Qtr Bureau of Economic analysis, Retrieved 7/30/2008]</li> <li id="_note-3">[[#_ref-3|↑]] [http://news.bbc.co.uk/1/hi/business/1561162.stm Why Consumer Confidence Matters?, BBC New, Retrieved 7/20/2008]</li></ol></ref>
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