Consumer confidence

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newratings.com  Jan 19  Comment 
AMSTERDAM (dpa-AFX) - Dutch consumer confidence strengthened in December to its highest level in nine-and-a-half years, while spending growth accelerated marginally in November, figures from the Central Bureau of Statistics showed Wednesday. The...
Benzinga  Jan 18  Comment 
AUD/USD is trading at 0.7550, down 0.0015. The pair is trading range bound. Market chatter about global headline news and U.S. economic data due out later today is making the rounds. The Westpac-Melbourne Institute Australian consumer...
Benzinga  Jan 13  Comment 
The March U.S. Dollar Index is trading at 101.59, up 0.21. The U.S. Dollar Index is trading rangebound and has edged up a little. Market talk about comments from various policy makers has kept buyers and sellers active. The University...
CNNMoney.com  Jan 12  Comment 
President-elect Donald Trump's election victory helped boost profits for Delta Air Lines.
Benzinga  Jan 10  Comment 
USD/JPY is trading at 116.04, up 0.06. The pair is trading just under the session highs after showing weakness overnight. Market chatter about global money flows and headline news is making the rounds. Japan's Cabinet Office reported that...
newratings.com  Jan 10  Comment 
TOKYO (dpa-AFX) - Japan's consumer confidence strengthened to the highest level in more than three years in December, survey data from the Cabinet Office showed Tuesday. The consumer sentiment index improved to 43.1 in December from 40.9 in...
Benzinga  Jan 6  Comment 
EUR/USD is trading at 1.0592, down 0.0011. The European Commission reported that December business confidence for the Euro area rose to 0.8 versus 0.41 in November. Consumer Confidence improved to minus 5.1 from minus 6.2 in November. Industrial...
newratings.com  Jan 4  Comment 
VIENNA (dpa-AFX) - French shares moved in a narrow range on Wednesday after official data showed French consumer sentiment held steady at its highest level in more than nine years in December. The consumer confidence index came in at 99.0 in...




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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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