Consumer confidence

RECENT NEWS
newratings.com  Mar 23  Comment 
COPENHAGEN (dpa-AFX) - Denmark's consumer confidence strengthened for the third straight month in March to the strongest level in just over one-and-a-half years, figures from Statistics Denmark showed Thursday. The consumer confidence index...
newratings.com  Mar 23  Comment 
ANKARA (dpa-AFX) - Turkey's consumer confidence strengthened unexpectedly in March, after weakening in the previous month, figures from the Turkish Statistical Institute showed Thursday. The consumer confidence index climbed to 67.8 in March...
newratings.com  Mar 23  Comment 
BERLIN (dpa-AFX) - Germany's consumer sentiment index is set to weaken in April, survey data from the market research group GfK showed Thursday. The forward-looking consumer confidence index dropped to 9.8 in April from 10.0 in March. The...
The Economic Times  Mar 22  Comment 
Effects of the November 8 demonetisation that sent consumer confidence and sales plunging until February continue to reverberate across high-street shops and malls.
guardian.co.uk  Mar 20  Comment 
The exuberant market reaction to his win has not been translated into progress – he must work with Congress to deliver Financial markets seem convinced that the recent surge in business and consumer confidence in the US economy will soon be...
newratings.com  Mar 20  Comment 
AMSTERDAM (dpa-AFX) - Dutch consumer confidence strengthened further in March to the highest level in more than nine-and-a-half years, figures from the Central Bureau of Statistics showed Monday. The seasonally adjusted consumer confidence index...
Forex News  Mar 17  Comment 
The USD/JPY currency pair today declined significantly after the release of the University of Michigan preliminary consumer confidence index, which indicated that the headline index had beat expectations. Despite the strong data from...
newratings.com  Mar 17  Comment 
BRUSSELS (dpa-AFX) - Following the release of the University of Michigan's preliminary consumer sentiment data for March at 10:00 am ET Friday, the greenback inched down against its major rivals. The greenback was trading at 1.0750 against...
Clusterstock  Mar 17  Comment 
Consumer confidence rose more than expected in March, according to a preliminary report from the University of Michigan.  The consumer sentiment index increased to 97.6 from 96.3 in the final February survey, according to Bloomberg. A reading...




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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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