Consumer confidence

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The Economic Times  May 15  Comment 
The S&P 500 edged higher to a new record in choppy trade following disappointing reports on US industrial production and consumer confidence.
newratings.com  May 15  Comment 
CANBERA (dpa-AFX) - The U.S. dollar fell against its major rivals in New York deals on Friday, trimming its early advance, after data showed that U.S. consumer sentiment index declined in May, further underscoring worries about the strength of...
Wall Street Journal  May 15  Comment 
Yahoo  May 15  Comment 
Consumer confidence unexpectedly fell in May by the most in more than two years as Americans’ views on the economy dimmed. The University of Michigan preliminary index of sentiment dropped to 88.6, the ...
Clusterstock  May 15  Comment 
US consumers are losing faith. Join the conversation about this story » NOW WATCH: This simple exercise will work out every muscle in your body
newratings.com  May 15  Comment 
TOKYO (dpa-AFX) - Japanese consumer sentiment fell unexpectedly in April, survey results from the Cabinet Office showed Friday. The consumer confidence index dropped to a seasonally adjusted 41.5 in April from 41.7 in March. It was forecast to...
New York Times  May 15  Comment 
newratings.com  May 14  Comment 
WASHINGTON (dpa-AFX) - Reflecting decreases in the assessment of current conditions and the economic outlook, the University of Michigan released a report on Friday showing a substantial decrease in U.S. consumer sentiment in the month of...
newratings.com  May 7  Comment 
BRUSSELS (dpa-AFX) - Swiss consumer confidence remained unchanged in April despite the weakness in the assessment of past economic trends, survey data from the State Secretariat for Economic Affairs showed Thursday. The consumer climate index...
newratings.com  May 1  Comment 
WASHINGTON (dpa-AFX) - Consumer sentiment in the U.S. saw a modest improvement in the month of April, according to a report released by the University of Michigan on Friday. The report said the consumer sentiment index for April came in at...
Clusterstock  May 1  Comment 
Consumer sentiment continues to be very positive. The University of Michigan's consumer sentiment index registered at 95.9 in April, which was only a hair below the 96.0 expected by economists. "Consumer confidence remained unchanged in late...
Reuters  May 1  Comment 
California's gasoline sales are rising rapidly as cheaper fuel, rising consumer confidence and a steadily improving economy encourage motorists to use their cars more.




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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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