What Is the Consumer Confidence Index?
The Consumer Confidence Index (CCI) Survey is an index by The Conference Board that measures how optimistic or pessimistic consumers are with respect to the economy in the near future. The Consumer Confidence Index (CCI) is based on the concept that if consumers are optimistic, they tend to purchase more goods and services. This increase in spending inevitably stimulates the whole economy.
Consumer Confidence Index
Understanding Consumer Confidence Index (CCI)
The index is released on the last Tuesday of every month. It is a barometer of the health of the U.S. economy and is based on consumers' perceptions of current business and employment condition, and their expectations for business, employment, and income for the next six months. It is conducted for The Conference Board by Nielsen, a global provider of information and analytics on consumers' buying and watching habits.
The Consumer Confidence Index is based on the Consumer Confidence Survey, which is a survey of 5,000 households. The survey was first conducted in 1967 every two months. It changed to monthly tracking in 1977. There are five questions asked: two related to present economic conditions and three related to future expectations. Each response can be answered with one of three responses: positive, negative or neutral. There is also a Present Situation Index, which is an average of two questions related to current economic conditions. An Expectations Index is based on responses to the other three questions. The index was set to 100 in 1985.
A Leading Indicator
The CCI is a leading economic indicator for the U.S. economy. The Organization for Economic Co-operation and Development (OECD) considers consumer confidence a leading indicator. Leading indicators provide qualitative information used to monitor the current economic situation and as a warning of turning points in economic activity.
In January 2018, The Conference Board announced that the Index was at 125.4 ( it was 100 in 1985), up from 123.1 in December of 2017. The Present Situation Index decreased slightly, from 156.5 to 155.3, while the Expectations Index increased from 100.8 in December 2017 to 105.5 in January 2018. Consumer confidence improved in January after declining in December and was strong overall.
The Conference Board
The Conference Board is a global, independent business membership and research association. It was formed in 1916 and its mission is to provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Board is designed to help its members understand and navigate the most critical issues of the present time. The Board also conducts research and forums where business leaders convene. These insights feed into its research and meeting agendas.