Consumer confidence

RECENT NEWS
MarketWatch  Feb 10  Comment 
The National Retail Federation expects retail sales, excluding automobile, gas station and restaurant sales, to grow 3.1% in 2016. "Wage stagnation is easing, jobs are being created and consumer confidence remains steady, so despite the headwinds...
The Economic Times  Feb 8  Comment 
Consumer sentiments in India rose for the first time in the last four months by 1.2% to 109.8 in January as households have been relatively upbeat about purchasing.
newratings.com  Feb 4  Comment 
BRUSSELS (dpa-AFX) - The State Secretariat for Economic Affairs issued Swiss consumer confidence survey results in the pre-European session on Thursday at 1:45 am ET. After the data, the Swiss franc changed little against its major rivals. As...
Forbes  Feb 3  Comment 
This month, Deborah Weinswig, Executive Director, Head Global Retail & Technology, Fung Business Intelligence Centre, has provided comments on some of Prosper’s leading indicator analytics including Prosper Consumer Confidence, the Prosper...
newratings.com  Feb 3  Comment 
TOKYO (dpa-AFX) - Japan's consumer confidence weakened as expected at the start of the year, though slightly, survey data from the Cabinet Office showed Wednesday. The seasonally adjusted consumer confidence index dropped to 42.5 in January,...
newratings.com  Feb 3  Comment 
BRUSSELS (dpa-AFX) - The Cabinet office is slated to release the Japan consumer confidence index for January at 12:00 am ET Wednesday. The index is seen at 42.5, compared to 42.7 in December. Ahead of the data, the yen rose against its major...
Clusterstock  Jan 29  Comment 
Consumers' outlook on the economy weakened slightly in January, according to the University of Michigan's monthly survey. The final consumer sentiment index was 92 for January. Economists had estimated a print of 93 for January, down a bit...
newratings.com  Jan 27  Comment 
BERLIN (dpa-AFX) - German consumer confidence is set to remain unchanged at an elevated level in February as heightened terror threat and refugee crisis have not yet had a lasting effect on sentiment, survey results from GfK showed Wednesday. The...
The Times of India  Jan 26  Comment 
A strong job market and low gasoline prices helped boost US consumer confidence again this month.
Yahoo  Jan 26  Comment 
There are, however, signs the malaise from manufacturing and export-oriented industries is starting to filter into the services sector, with data on Tuesday showing activity in that vast sector hit a one-year low in January. The Conference Board...




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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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