Consumer confidence

RECENT NEWS  6 hrs ago  Comment 
LONDON (dpa-AFX) - U.K. consumer confidence declined in June for the first time in 2014, according to Lloyds Bank Spending Power Report, published on Monday. The overall consumer confidence index fell by a percentage point to 145 in...
Yahoo  8 hrs ago  Comment 
One measure of consumer confidence in Britain fell for the first time this year in June, the latest sign of a cooling in sentiment about the country's economic recovery. The overall index of consumer confidence compiled by Lloyds Bank eased one...  Jul 18  Comment 
BRUSSELS (dpa-AFX) - The Reuters/University of Michigan's preliminary consumer sentiment index for July is due at 9:55 am ET Friday. Ahead of the data, the greenback showed mixed trading against its major rivals. While the greenback held...  Jul 18  Comment 
BRUSSELS (dpa-AFX) - Belgium's consumer confidence fell for the second straight month in July to its lowest level in a year as economic expectations weakened, survey data from the National Bank of Belgium showed Friday. The consumer...
Clusterstock  Jul 18  Comment 
The University of Michigan's preliminary read on consumer sentiment in July was a bit disappointing. The headline index slipped to 81.3 from 82.5 in June. Economists estimated the headline index would climb to 83.0. The economic conditions...
The Australian  Jul 15  Comment 
CONSUMER confidence has bounced back to levels not seen since before the federal government’s tough budget was released in May.  Jul 10  Comment 
TOKYO (dpa-AFX) - Consumer confidence in Japan increased in June, a report from the Cabinet Office showed Thursday. The consumer confidence index rose to 41.1 in June from 39.3 in May, with all the sub-indices contributing positively to the...
The Economic Times  Jul 9  Comment 
Virtual surrender could batter investor and consumer confidence in the country.
Mondo Visione  Jul 9  Comment 
Car leasing can now be added to the growing list of products and services that consumers in the UK can purchase with popular crypto-currency Bitcoin. This comes after an announcement by nationwide lease broker that it now...


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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