Present Situation Index

DEFINITION of 'Present Situation Index'

A subindex that measures overall consumer sentiments toward the present economic situation and is used to derive (about 40% of) the Consumer Confidence Index, a widely used economic indicator. The sub-index is compiled from data gathered from a survey of 5,000 households on questions regarding current business and employment conditions. Also known as "Current Situation Index".

BREAKING DOWN 'Present Situation Index'

The Conference Board conducts this survey, in which participants are asked if they feel that current business conditions are good, bad or normal, and if they feel that current employment conditions are plentiful, not so plentiful or hard to get. Businesses use this sub-index to give themselves an idea about current market conditions, which allows them to make more informed business decisions. Once an appraisal of the present situation is conducted and a value calculated, it is combined with another sub-index called the Expectations Index to form the Consumer Confidence Index. For example, if the survey showed current business conditions as good and current employment conditions as plentiful, an economist may view this as a positive signal that the economy is in recovery.



RELATED TERMS
  1. Expectations Index

    A sub-index that measures overall consumer sentiments toward ...
  2. Subindex

    A group of securities that are part of a larger classification, ...
  3. Consumer Confidence Index - CCI

    A survey by the Conference Board that measures how optimistic ...
  4. NY Empire State Index

    A seasonally adjusted index that tracks the results of the Empire ...
  5. Michigan Consumer Sentiment Index ...

    A survey of consumer confidence conducted by the University of ...
  6. Westpac Consumer Confidence Index

    An index measuring the level of consumer confidence in Australia. ...
Related Articles
  1. Markets

    Understanding The Consumer Confidence Index

    We look at this closely watched economic indicator to see what it means and how it's calculated.
  2. Investing

    Consumer Confidence Index

    The Consumer Confidence Index is the result of a monthly survey of 5,000 U.S. households by the Conference Board that measures how optimistic or pessimistic consumers are about the economy's ...
  3. Markets

    What You Need To Know About The Employment Report

    This widely watched indicator of economic well-being directly influences the market.
  4. Trading

    How To Read The Michigan Consumer Sentiment Index

    The Michigan Consumer Sentiment Index has provided a key leading indicator for investors and economists for decades. This respected index is published monthly from the results of random telephone ...
  5. Markets

    Tankan Survey Provides Clues To Japanese Economy

    This quarterly survey is crucial for assessing Japan's economic health.
  6. Markets

    Why the Purchasing Managers' Index Matters

    The Purchasing Managers' Index is a telling sign of the U.S. economy. But what is it?
  7. Markets

    Does the Empire State Index Signal a Recession?

    This morning, the New York Federal Reserve Bank reported the worst numbers in six years for its August 2015 Empire State Manufacturing Survey, indicating not only a potential economic slowdown ...
  8. Markets

    Consumer Confidence Down From Last Year

    Economic readings point to good times ahead. Consumer sentiment says something else. What is correct?
  9. ETFs & Mutual Funds

    ETF/ETN Analysis: Natural Gas Subindex

    Discover an analysis of the iPath Bloomberg Natural Gas Subindex ENT, and learn about its characteristics and how it seeks to track its underlying index.
  10. Markets

    4 Key Indicators That Move The Markets

    Find out what reports to watch in order to anticipate and react to market movements.
RELATED FAQS
  1. What's the difference between consumer confidence and consumer sentiment?

    There isn't a difference between consumer confidence and consumer sentiment. Both terms are used to refer to the degree of ... Read Answer >>
  2. How should an investor interpret the consumer and business confidence index when ...

    Learn how investors benefit from watching the consumer and business confidence indexes, along with other key metrics, when ... Read Answer >>
  3. Why should an investor in the retail sector consider the Consumer Confidence Index?

    Learn how the Consumer Confidence Index works and why it is such a valuable tool for retail investors to predict future consumer ... Read Answer >>
  4. What economic indicators are important to consider when investing in the retail sector?

    Learn why the unemployment rate and Consumer Confidence Index are two of the best economic indicators when investing in the ... Read Answer >>
  5. Which economic factors most affect the demand for consumer goods?

    Understand how key economic factors such as inflation, unemployment, interest rates and consumer confidence affect the level ... Read Answer >>
  6. How does the Federal Government track the business cycle?

    Learn more about the agencies used by the federal government to research business cycle changes and inform decisions about ... Read Answer >>
Hot Definitions
  1. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  2. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  3. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  4. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  5. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  6. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
Trading Center