Consumer confidence

RECENT NEWS  Dec 5  Comment 
TOKYO (dpa-AFX) - Japan's consumer confidence declined for the second straight month in November to the weakest level in six months, survey figures from Cabinet Office showed Monday. The seasonally adjusted consumer confidence index fell to...
The Hindu Business Line  Dec 4  Comment 
Rebuilding consumer confidence needs to be the Centre’s top priority, if the Q2 slowdown in GDP growth is to be arrested
The Economic Times  Dec 2  Comment 
Chaudhry maintained that consumer confidence must he held up as India is a consumption-driven economy, and FDI also depends on the same.
MarketWatch  Nov 30  Comment 
Despite the pop in financial markets and consumer confidence in the wake of the election, there was no sign yet that it has impacted the economy, according to the Federal Reserve’s Beige Book released Wednesday.
Benzinga  Nov 30  Comment 
GBP/USD is trading at 1.2434, down 0.0054. The pair is trading just above the session lows. Market talk about comments from Bank of England (BOE) members and U.K. economic policy makers is making the rounds. GfK reported that U.K consumer...  Nov 30  Comment 
CANBERA (dpa-AFX) - The New Zealand dollar continued to be strong against the other major currencies in the Asian session on Wednesday, as Asian shares are trading mostly higher after data showed the U.S. economy grew faster than initially...  Nov 30  Comment 
LONDON (dpa-AFX) - Consumer confidence in the United Kingdom fell sharply in November, the latest survey from GfK revealed on Wednesday with an index score of -8. That was well shy of expectations for a reading of -4 after coming in at -3...  Nov 29  Comment 
WASHINGTON (dpa-AFX) - In welcome news for retailers going into the holiday shopping season, the Conference Board released a report on Tuesday showing a much bigger than expected jump in U.S. consumer confidence in the month of November. The...  Nov 29  Comment 
WASHINGTON (dpa-AFX) - U.S. stock index futures point to a slightly higher open on Tuesday after losses in the previous session. With the second estimate GDP data for the third quarter and reports on homes prices and consumer confidence slated for...


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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