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.