Consumer confidence

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Motley Fool  Dec 31  Comment 
It seems obvious that higher consumer confidence is good for banks, but why exactly is this the case?
Benzinga  Dec 29  Comment 
On CNBC's Fast Money, Tim Seymour revealed that he is bullish on PulteGroup, Inc. (NYSE: PHM). He explained that the consumer confidence is at its 15-year high and home ownership is at a five-decade low. He added that inventories in the...
CNNMoney.com  Dec 28  Comment 
President-elect Donald Trump is already taking credit for the economy.
DailyFinance  Dec 28  Comment 
Filed under: News, White House As announced on Tuesday, the U.S. Consumer Confidence Index recently hit a high mark not seen in some time, reports ABC News. Not long after, Donald Trump swooped in, tweeting himself a congratulatory...
MarketWatch  Dec 28  Comment 
President-elect Donald Trump took to Twitter to thank himself for the latest U.S. economic data.
Benzinga  Dec 28  Comment 
EUR/USD is trading at 1.0432, down 0.0028. Italy's National Institute of Statistics (ISTAT) reported that December business confidence rose to 103.5 from 102.2 and consumer confidence improved to 111.1 from 108.1. The agency is scheduled to...
newratings.com  Dec 28  Comment 
CANBERA (dpa-AFX) - Asian stocks fluctuated before closing mostly higher on Wednesday as many regional markets resumed trading after the long holiday weekend. While a weaker yen, higher oil prices and upbeat U.S. consumer confidence and housing...
New York Times  Dec 28  Comment 
The Consumer Confidence Index rose to 113.7 this month, its highest mark since August 2001, as Americans expressed optimism for better economic times.
newratings.com  Dec 27  Comment 
WASHINGTON (dpa-AFX) - After ending the previous session modestly higher, treasuries moved back to the downside during trading on Tuesday. Bond prices moved lower in early trading and remained stuck in the red throughout the session. As a...
newratings.com  Dec 27  Comment 
WASHINGTON (dpa-AFX) - After reporting a significant improvement in U.S. consumer confidence in the previous month, the Conference Board released a report on Tuesday showing that consumer confidence continued to improve in the month of...




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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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