Consumer confidence

RECENT NEWS
guardian.co.uk  Aug 29  Comment 
UK consumer confidence report, manufacturing and construction surveys and house price data to shed further light on economic effect of the EU vote There will be fresh clues on how the Brexit vote has affected households and businesses this week...
Benzinga  Aug 29  Comment 
EUR/USD is trading at 1.1188, down 0.0005. The pair is trading rangebound early Monday morning. Market chatter about headline news has kept buyers and sellers active in a narrow range. Italy's ISTAT reported that August business...
newratings.com  Aug 29  Comment 
ROME (dpa-AFX) - Italy's consumer confidence fell to its lowest level in over a year and business sentiment reached an 18-month low in August, preliminary data from ISTAT showed Monday. The consumer confidence index decreased to 109.2 from...
newratings.com  Aug 29  Comment 
HELSINKI (dpa-AFX) - Finland's consumer confidence increased in August to the strongest level more than five years, figures from Statistics Finland showed Monday. The consumer confidence index rose to 15.7 in August from 13.1 in the...
The Economic Times  Aug 29  Comment 
According to the latest consumer confidence survey and RBI report, as much as 82 per cent respondents expect their spending to rise next year.
newratings.com  Aug 26  Comment 
VIENNA (dpa-AFX) - The European markets got off to a weak start Friday, ahead of today's highly anticipated speech by Fed Chair Janet Yellen. The markets came off their early lows after the release of some solid German and French consumer...
newratings.com  Aug 26  Comment 
WASHINGTON (dpa-AFX) - Consumer sentiment in the U.S. unexpectedly saw a slight decline in the month of August, according to a report released by the University of Michigan on Friday. The report said the final reading on the consumer sentiment...
newratings.com  Aug 26  Comment 
BRUSSELS (dpa-AFX) - Following the release of the University of Michigan's final estimate of its U.S. consumer sentiment for August at 10 am ET Friday, the greenback climbed against its major rivals. The greenback was trading at 1.1246...
Clusterstock  Aug 26  Comment 
The University of Michigan's final reading for consumer confidence in the month of August came in at 89.8, lower than economist's expectations. The number is also lower than the preliminary number of 90.4 from August 12. This is a...
Benzinga  Aug 26  Comment 
EUR/USD is trading at 1.1305, up 0.0018. The pair is trading just under the highs of the session. Market chatter about global headline news and comments from policy makers is making the rounds. Italy's ISTAT is scheduled to report...




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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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