Consumer confidence

RECENT NEWS
MarketWatch  May 26  Comment 
A consumer confidence measure rose fractionally in May as Democrats and Republicans offset each other, and views of current conditions rose but forecasts for the future declined.
Wall Street Journal  May 19  Comment 
The victory of a pro-European centrist in France’s presidential election has delivered a further boost to already high consumer confidence in the eurozone.
Clusterstock  May 13  Comment 
A Bank of America Merrill Lynch team found that consumers' feelings about the economy were mostly tied to underlying "hard" economic data Political uncertainty didn't seem to have much effect on those feelings Despite that, politics — and...
MarketWatch  May 12  Comment 
A consumer confidence tracker was stronger than expected in May, as incomes strengthened and inflation remained tame.
guardian.co.uk  May 12  Comment 
All the day’s economic and financial news, as Germany posts strong growth figures at the start of 2017 US consumer confidence rises again Germany grew by 0.6% in Q1 Business investment and domestic spending drive growth UK, US and France...
WA Business News  May 9  Comment 
There has been a slight upswing in consumer confidence ahead of the federal budget, which may signal an improvement in the jobs market.
Financial Times  May 3  Comment 
Integration of Argos and overhaul of banking arm weigh on supermarket group




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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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