Consumer confidence

RECENT NEWS  2 hrs ago  Comment 
BRUSSELS (dpa-AFX) - Belgium's consumer confidence rose for the first time in three months in May to reach its highest level in four years, on the back of significant improvement in the macroeconomic outlook during the month, the National...  8 hrs ago  Comment 
AMSTERDAM (dpa-AFX) - Dutch consumer confidence improved as expected in May after stagnating in the previous month, while consumer speeding growth eased slightly in March, figures from the Central Bureau of Statistics showed Friday. The consumer...  May 21  Comment 
VIENNA (dpa-AFX) - Eurozone consumer confidence deteriorated for a second straight month in May and at a faster-than-expected pace, preliminary estimates from the European Commission showed Thursday. The flash consumer confidence index dropped...
Wall Street Journal  May 21  Comment 
The eurozone’s economy slowed and consumer confidence weakened for the second straight month in May, according to surveys.  May 21  Comment 
ANKARA (dpa-AFX) - Confidence among consumers in Turkey dropped in May, belying expectations for an increase, figures from Turkstat showed Thursday. The consumer confidence index fell to 64.29 in May from 65.35 in the previous month. However,...
The Australian  May 20  Comment 
Consumer confidence has shot up to its highest level in months, thanks to the budget and the RBA’s latest rate cut.
Yahoo  May 19  Comment 
The Federal Reserve’s plan to raise interest rates this year, forged over months of strong jobs growth and a seemingly durable expansion, now faces an economy that no longer follows the script and may push the “liftoff” far into the future....
The Australian  May 18  Comment 
Consumer confidence has risen to its highest level since November following the federal budget, according to a new index.  May 18  Comment 
WASHINGTON (dpa-AFX) - The dollar is gaining ground against all of its major competitors Monday, as it attempts to rebound from some recent weakness. The U.S. currency has continued to rise even after the release of the disappointing homebuilder...


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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