Consumer confidence

RECENT NEWS
newratings.com  Oct 17  Comment 
BRUSSELS (dpa-AFX) - The U.S. dollar moved up against its major rivals in New York deals on Friday, as the U.S. consumer sentiment index rose more-than-expected in October. A preliminary survey by the Reuters/University of Michigan showed that...
Clusterstock  Oct 17  Comment 
Consumer confidence came in at 86.4, beating expectations, according to the  preliminary October report on consumer confidence from the University of Michigan. Expectations were for the reading to fall slightly to 84 from last month's...
WA Business News  Oct 16  Comment 
James Packer says lucky high rollers and weak consumer confidence are hurting Crown's performance.
WA Business News  Oct 15  Comment 
Consumers are starting to feel a little more optimistic, but confidence remains down in the dumps.
newratings.com  Oct 10  Comment 
TOKYO (dpa-AFX) - Consumer confidence in Japan decreased unexpectedly in September, data from the Cabinet Office showed Friday. The consumer confidence index fell to 39.9 in September from 41.2 in August. Economists had expected the index to rise...
Wall Street Journal  Oct 9  Comment 
Faster job growth and stronger consumer confidence are already putting the U.S. expansion on a steady trajectory heading into 2015. Now, falling energy prices are offering another boost, according to The Wall Street Journal’s monthly survey of...
The Australian  Oct 8  Comment 
BANK of Queensland expects business investment and consumer confidence will remain subdued, as it delivered a record full-year cash profit.
Mondo Visione  Oct 7  Comment 
Attorney General Eric T. Schneiderman today praised the agreement between the University of Michigan and Bloomberg LP to distribute the university’s consumer confidence survey through Bloomberg’s news service. Bloomberg will take over...
MarketWatch  Oct 7  Comment 
Investors will no longer be able to get a sneak peek at the University of Michigan’s consumer confidence survey after the university agreed to allow Bloomberg LP to distribute the economic indicator starting next year.




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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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