Consumer confidence

The Australian  Apr 15  Comment 
Consumer confidence has fallen ahead of the May federal budget, as drops in commodity prices sparks worries about the economy.
Market Intelligence Center  Apr 14  Comment 
The U.S. housing market saw a rough first quarter as softening consumer confidence and a measure of economic uncertainty led to a lull in housing activity. Severe winter conditions, which seasonally slow down construction activity at the beginning...
Forbes  Apr 8  Comment 
Information security is perhaps the busiest technology sector right now. And with good cause - hardly a week goes by without a major organization suffering a financially damaging, credibility crucifying and consumer confidence bruising data breach...
Financial Times  Apr 8  Comment 
Sales are powering ahead thanks to credit, discounting by carmakers and rising consumer confidence
Forbes  Apr 2  Comment 
The stock index futures recovered from the selling early Wednesday but still closed lower. Despite the losses in the major averages, the A/D ratios were positive. The market also reacted to the further drop in the ISM Manufacturing Index as it...
Yahoo  Mar 31  Comment 
U.S. consumer confidence rebounded strongly in March amid optimism over the labor market while house prices increased in January, hopeful signs that a recent sharp slowdown in economic activity was probably a blip.
Market Intelligence Center  Mar 31  Comment 
Clusterstock  Mar 31  Comment 
Consumers are feeling great. The Conference Board's March reading came in at 101.3, crushing expectations and showing continued optimism from US consumers.  Expectations were for the reading to come in at 96.4, unchanged from 96.4 in...
Clusterstock  Mar 30  Comment 
The European Commission just confirmed the strongest consumer confidence in the eurozone since mid-2007. As measured by the EC, the confidence index rose to -3.7, from -6.7 in February. Those are the best readings seen since mid-2007. Consumer...


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:


  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>[ University of Michigan Consumer Sentiment Index: Survey Information, retrieved 07/25/08]</li> <li id="_note-2">[[#_ref-2|↑]] [ Bureau of Economic analysis, Retrieved 7/30/2008]</li> <li id="_note-3">[[#_ref-3|↑]] [ Why Consumer Confidence Matters?, BBC New, Retrieved 7/20/2008]</li></ol></ref>
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