There isn't a difference between consumer confidence and consumer sentiment. Both terms are used to refer to the degree of confidence consumers feel about the overall economy and their personal financial state. Consumer confidence or sentiment dictates the level of spending that consumers will engage in. A high level of consumer confidence means that consumers, generally feel good about their financial condition, especially their ability to obtain and keep jobs. If consumer confidence is relatively high, then consumers are going to increase the amount of money that they spend. On the other hand, if consumer confidence is relatively low, then consumers are going to spend less.
Consumer confidence is measured by two indexes: the Consumer Confidence Index (CCI) and the Michigan Consumer Sentiment Index (MCSI). The CCI is a survey conducted by a not-for-profit research organization for businesses that distributes information about management and the marketplace. This organization is sometimes known as the Conference Board.The Conference Board usually surveys 5000 households from the country's nine census region. The survey usually covers five major sections:
- Current business conditions
- Business conditions for the next six months
- Current employment conditions
- Employment conditions for the next six months
- Total family income for the next six months.
The MCSI is a telephone survey conducted by the University of Michigan. The purpose of the survey is to collect information about consumer expectations regarding the overall economy. The MCSI also covers five sections:
- Personal financial situation now and a year ago
- Personal financial situation one year from now
- Overall financial condition of the business for the next twelve months
- Overall financial condition of the business for the next five years
- Current attitude toward buying major household items.
Learn what price deflation is, how inflation rates can be calculated using the consumer price index and what some causes ...
Learn the most commonly used technical indicators of stock market volatility that are watched by stock market traders and ...
Learn about wide-ranging days and how traders use this single-session candlestick pattern to predict trend reversal and create ...
Learn more about the agencies used by the federal government to research business cycle changes and inform decisions about ...
A ratio developed by Nobel laureate William F. Sharpe to measure ...
A financial product that pays out a fixed stream of payments ...
The sharp drop in a publicly traded company’s share price that ...
The endowment effect describes a circumstance in which an individual ...
The self-enhancing bias is the tendency for individuals take ...
Gamification describes the incentivization of people's engagement ...