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Consumer Confidence Index - Explained

What is the Consumer Confidence Index?

Written by Jason Gordon

Updated at April 24th, 2022

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Table of Contents

What is the Consumer Confidence Index?What is the Purpose of the Consumer Confidence Index (CCI)A Leading IndicatorThe Conference BoardAcademic Research on the Consumer Confidence Index - CCI

What is the Consumer Confidence Index?

The Consumer Confidence Index (CCI) Survey is a metric that evaluates the level of optimism or pessimism of consumers with regard to the future economy and the expected financial state. The two economic factors that the CCI index measures are savings and spending habits exhibited by consumers, these habits express whether the consumers are optimism or pessimistic about the future economy. In the United States, the Conference Board oversees and publishes the findings of the CCI index. This index also gives an insight into the patterns of household savings and consumption as reflected in their spending and savings.

Back to:ECONOMIC ANALYSIS & MONETARY POLICY

What is the Purpose of the Consumer Confidence Index (CCI)

In the United States, the Consumer Confidence Index (CCI) index evaluates the perceptions of individuals and households about the U.S economy and how much confidence they have in the economy. Their level of confidence is presented as their optimism or pessimism towards the current economy and their expectations in the economy in the future. These are reflected in their patterns of spending and savings. CCI index uses a survey conducted using 5,000 households, the index or findings of the survey are published by the Conference Board monthly, usually the last Tuesday. The CCI survey was conducted in the 1960s and by 1970s, the survey was done every month.

A Leading Indicator

The CCI serves as an important indicator that reflects the confidence of households in the current economy and future economy as displayed in their spending or savings. For instance, when households and individuals are positive (optimistic) about the economy, they tend to spend more money and save less but when they are negative (pessimistic) about the economy, the save more and spend a little. The CCI survey will reflect the disposition of individuals to present and economic situation, the positions taken by individuals can be positive, negative or neutral. In the CCI survey, five important questions are asked individuals and households, these questions revolve around the current economic situations and what individuals expect from the economy in the future.

The Conference Board

The Conference Board is a global association, a non-profit business membership that conducts researches targeted at improving societies. The Conference Board plays a key role in the Consumer Confidence Index (CCI) survey, this board publishes the CCI index every month. In December 2017, the Conference Board announced that the Index was at 123.1, while in January 2018, the index has moved up to125.4. The Conference Board also equips its members on how to overcome critical issues, and improve the performance of countries.

Related Topics

  • Consumption
  • Lifecycle Model of Consumption
  • Autonomous Consumption
  • Permanent Income Hypothesis
  • Income Effect
  • Lipstick Effect
  • Engel's Law
  • Consumerism
  • Paradox of Thrift
  • Ricardo Barro Effect
  • Consumer Confidence Index
  • The Wealth Effect



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