US Consumer Confidence: Are The Markets In Fear Or Cheer Mode?

US CB Consumer Confidence is an economic indicator that monitors consumers' confidence in the economy. It is based on a survey of 5,000 US households. They were asked their views and opinions about current and future economic conditions, including employment, income, inflation, and the stock market.

 

The Conference Board, a non-profit research organization, compiles the Consumer Confidence Index (CCI), released monthly. The index is created by adding the proportion of respondents who believe that the current state of the economy is "good" or "excellent" to the proportion who believe that there are "plentiful" jobs. The total is split by the proportion of respondents who state that business conditions are "bad" or "poor."

 

The Conference Board Consumer Confidence Index® fell in May to 102.3 (1985=100), down from an upwardly revised 103.7 in April. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—decreased to 148.6 (1985=100) from 151.8 last month. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—decreased slightly to 71.5 (1985=100) from 71.7. The Expectations Index has now remained below 80—the level associated with a recession within the next year—every month since February 2022, with the exception of a brief uptick in December 2022.

 

Consumer spending makes for a major amount of the country's Gross Domestic Product (GDP), hence the Consumer Confidence Index (CCI) is one of the most highly followed economic indicators in the United States. Consumers who are optimistic about the economy are more likely to spend money on products and services, which can stimulate economic growth.

 

The CCI is comprised of two components: The Present Situation Index, which assesses consumers' current business and labor market conditions, and the Expectations Index, which assesses consumers' short-term (six-month) expectations for income, business, and labor market conditions.

 

It's worth noting that the Consumer Confidence Index is just one of many economic indicators that investors, policymakers, and economists use to gauge the health of the economy and make predictions about future growth. Other important indicators include GDP, inflation, employment levels, and consumer spending.

 

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