Definition
The Consumer Confidence Survey is a leading economic indicator designed to gauge the public’s sentiment about the state of the U.S. economy. Conducted monthly by different research organizations, the survey includes a random sampling of about 5,000 households. Participants are asked to evaluate current business conditions, labor market trends, consumer spending habits, economic growth, and their expectations concerning employment and personal financial status over the next six months.
Examples
- The Conference Board Consumer Confidence Index®: This monthly survey measures the level of optimism or pessimism that consumers feel about the overall state of the economy.
- The University of Michigan Consumer Sentiment Index: Similar to the Conference Board’s index, this measures consumer confidence based on surveys of household attitudes toward economic conditions.
Frequently Asked Questions
What is the purpose of the Consumer Confidence Survey?
The primary purpose of the Consumer Confidence Survey is to measure the public’s optimism or pessimism regarding economic conditions in order to predict consumer spending patterns, which drive a significant portion of the economy.
Who conducts the Consumer Confidence Survey?
The survey is typically conducted by research organizations such as The Conference Board and the University of Michigan, both of which have well-established methodologies.
How often is the Consumer Confidence Survey conducted?
The survey is conducted monthly to provide current data on consumer sentiment and economic conditions.
What topics are covered in the Consumer Confidence Survey?
The survey covers various topics, including business conditions, the labor market, consumer spending trends, economic growth expectations, and personal financial outlooks.
How does the Consumer Confidence Survey affect the economy?
High consumer confidence typically leads to higher consumer spending, which in turn boosts economic growth. Conversely, low consumer confidence can result in reduced spending and slower economic growth.
Related Terms
- Consumer Spending: Expenditure by households on goods and services, which drives a large portion of the economy.
- Economic Indicators: Quantitative indicators such as GDP, unemployment rate, and inflation that show the condition of an economy.
- Labor Market: The supply and demand for labor, where employers find workers and workers find jobs.
- Economic Growth: An increase in the production of goods and services in an economy over a period of time.
- Business Conditions: The state of the business environment, including factors like profitability, competition, and market trends.
Online References
- The Conference Board Consumer Confidence Index®
- University of Michigan Consumer Sentiment Index
- Federal Reserve Economic Data (FRED)
- U.S. Bureau of Economic Analysis (BEA)
Suggested Books for Further Studies
- “Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism” by George Akerlof and Robert Shiller
- “The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness” by Morgan Housel
- “Nudge: Improving Decisions About Health, Wealth, and Happiness” by Richard H. Thaler and Cass R. Sunstein
- “Understanding Economic Statistics: An OECD Perspective” by Organization for Economic Cooperation and Development (OECD)
- “Consumer Dummies: U.S. Economic Indicators” by Charles Jeszeck Keith
Fundamentals of Consumer Confidence Survey: Economics Basics Quiz
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