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. Subindex

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

    The Consumer Confidence Index (CCIA) Survey by the Conference ...
  3. Economic Conditions

    Economic conditions are the state of the economy in a country ...
  4. CEO Confidence Survey

    A monthly survey of 100 CEOs from a variety of industries in ...
  5. Philadelphia Federal Index

    A regional federal-reserve-bank index measuring changes in business ...
  6. Westpac Consumer Confidence Index

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

    Why Consumer Confidence Matters

    As consumer spending is a dominant component of the U.S. economy, how consumers feel about the economy can become self-fulfilling.
  2. Insights

    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. Trading

    4 Key Indicators That Move The Markets

    Do you rely on indicators to make an investment move? Find out these key economic and market indicators to watch and react to market movements.
  4. Investing

    SCO: ProShares UltraShort Bloomberg Crude Oil ETF

    Find out about the ProShares UltraShort Bloomberg Crude Oil ETF, the characteristics of the inverse ETF and the suitability and recommendations of it.
  5. Investing

    UCO: ProShares Ultra Bloomberg Crude Oil ETF

    Find out more about the ProShares Ultra Bloomberg Crude Oil ETF, the characteristics of UCO and the suitability and recommendations of UCO for investors.
  6. Personal Finance

    America’s Labor Market: Hidden Distortions and Uncertain Forecasts

    Employment reports released by the Bureau of Labor Statistics have a profound impact on political, business, consumer, and investor behavior.
  7. Insights

    Comparing Market Returns to Consumer Expectations

    A lot of pundits will tell you there are certain indicators of future market performance. But do those claims hold up?
  8. Trading

    Now Is the Time to Buy Sugar and Coffee (JO, SGG)

    Most traders are currently focused on hard commodities such as gold and oil. However, bullish price action in coffee and futures suggest now is the time to invest in soft commodities.
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. What are some limitations of the consumer price index (CPI)?

    Explore some of the basic limitations of the widely used economic indicator, the consumer price index, or CPI, and examine ... Read Answer >>
  4. How can consumer durables act as economic indicators?

    Learn how consumer durables act as economic indicators. Consumer durables are products with life spans of at least three ... Read Answer >>
  5. Is it Possible to Measure Investor Sentiment?

    Investor sentiment is an approximate measurement of the stock market's attitude at a given time. Read Answer >>
  6. What impact does a higher non-farm payroll have on the forex market?

    The employment report, released by the Bureau of Labor Statistics, is an economic indicator that contains data on the employment ... Read Answer >>
Hot Definitions
  1. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  2. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  3. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
  4. Cost of Goods Sold - COGS

    Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company.
  5. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and expenses incurred during a specified period of time, usually ...
  6. Monte Carlo Simulation

    Monte Carlo simulations are used to model the probability of different outcomes in a process that cannot easily be predicted ...
Trading Center