Consumer confidence

RECENT NEWS
Financial Times  Apr 14  Comment 
Signs are promising despite divergence in consumer confidence versus unemployment
Clusterstock  Apr 13  Comment 
Consumer confidence in the present state of the US economy rocketed to a 17-year high in April, according to preliminary results of the University of Michigan's April survey.  The overall consumer sentiment index jumped to 98 from 96.9 in...
Clusterstock  Mar 31  Comment 
Donald Trump voters and Hillary Clinton voters are putting their money to work differently postelection. We've noted that consumer confidence has become highly politicized, with Republicans extremely optimistic about the future of the economy...
Forbes  Mar 31  Comment 
Consumer confidence is at a 15-year high and Prosper’s Impulsivity Score and Consumer Mood metric are up as well. Deborah Weinswig, Managing Director of Fung Global Retail & Technology, weighs in on the state of the US consumer with the arrival...
Clusterstock  Mar 31  Comment 
Consumer confidence unexpectedly fell in March, according to the final report from the University of Michigan. The consumer sentiment index fell to 96.9 in the final March survey. Economists had forecast the index would hold steady from the...
The Economic Times  Mar 31  Comment 
India's consumer confidence is highest compared to other EM peers despite the near-term sentiment being adversely impacted by note ban, says a survey.
Forbes  Mar 30  Comment 
Credit Suisse released their annual emerging consumer survey, showing which of the big developing countries are looking to spend some money this year.
The Economic Times  Mar 30  Comment 
However, only 57 per cent of respondents thought it was a good time to make a major purchase, a sharp drop compared to 80 per cent last year.
Clusterstock  Mar 30  Comment 
President Donald Trump has made a record percentage of consumers believe that the government is great for business. Torsten Sløk, chief international economist at Deutsche Bank, put out a chart showing the percentage of respondents in recent...




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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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