Consumer confidence

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Bloomberg  Apr 11  Comment 
Consumer confidence rose in April to the highest level since July, boosted by further improvement in the labor market that will provide some traction for the economy after a weather-related slowdown early this year.
Clusterstock  Apr 11  Comment 
Preliminary results of the University of Michigan's April consumer confidence survey are out. The report's headline index advanced to 82.6 from March's 80.0 reading. Economists predicted a smaller gain to 81.0. The economic conditions...
FX Street  Apr 11  Comment 
Good morning, US futures treading water following Thursday’s significant losses; UoM consumer... For more information, read our latest forex news and reports.
Reuters  Apr 11  Comment 
* Market awaits resumption of Libyan oil exports (Adds settlement prices, CFTC data and analyst comment)
newratings.com  Apr 9  Comment 
CANBERA (dpa-AFX) - The Australian dollar strengthened against most major currencies in Asian deals on Wednesday, as reports showed that the nation's consumer confidence improved in April and home loans beat forecasts in February. The...
guardian.co.uk  Apr 4  Comment 
Shoppers are spending on Manchester's prosperous streets but are they driving the confidence recovery, or is it driving them? Consumer confidence has returned. That's got to be a good thing, right? You can say what you like about systemic risk and...
Wall Street Journal  Apr 4  Comment 
Demand for new cars in the U.K. surged 18% in March from the same month a year ago as the country's recovering economy, improved consumer confidence, and cheap financing continued to boost vehicle sales.
New York Times  Mar 28  Comment 
The Commerce Department reported a slight rise in spending in February, but a second report showed a slide in the consumer sentiment index.     




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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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