CB Consumer confidence is an economic indicator that measures the level of confidence and optimism among consumers regarding the general state of the economy and their personal financial situation. It provides insight into consumers’ perceptions, expectations and intentions, which are critical factors influencing their spending and saving behaviors.
The CB Consumer Confidence Index is based on a monthly survey conducted by Conference Board, a nonprofit research organization. The survey asks a representative sample of U.S. households a range of questions, with the aim of gauging consumers’ views on current economic conditions and their expectations for the future.
The indicator is derived from survey answers and is presented as a numerical value. A high index value indicates increased consumer confidence, indicating positive sentiment and a more optimistic outlook. Conversely, the depreciation of the index reflects lower confidence and more pessimistic sentiment.
CB’s consumer confidence is closely monitored by economists, policymakers, and market participants because it provides valuable insights into consumer behavior, an important driver of economic activity. Consumer spending accounts for a large portion of overall economic growth, and changes in consumer sentiment can have implications for business investment, employment levels, and financial markets.
The main CBI is often accompanied by sub-indicators, such as the Current Status Index, which measures consumers’ assessment of current economic conditions, and the Expectations Index, which reflects consumers’ expectations for the future. These sub-indicators provide more detail and understanding of consumer tendencies.
By monitoring CB’s consumer confidence, analysts and investors can gain insight into consumers’ spending appetite, financial outlook, and overall sentiment toward the economy. This information can help inform economic outlook, market trends, and business strategies across various industries.
Measuring Consumer Confidence: An Integrated Survey Methodology
CB (Conference Board) Consumer confidence is measured through surveys conducted by Conference Board, a nonprofit research organization. The survey aims to capture consumers’ perceptions and attitudes regarding the current and future state of the economy and their financial situation.
CB’s Consumer Confidence Measurement Methodology Includes the following steps:
Sample Survey: The Conference Board selects a representative sample of households across the United States to participate in the survey. The sample is designed to reflect the demographic composition of the population, including factors such as age, income, and geographic region.
Survey Questions: The survey consists of a set of questions covering different aspects of consumer confidence and expectations. These questions typically include queries about current economic conditions, employment prospects, income prospects, and future spending intentions.
Score and index calculation: Each answer to survey questions is assigned a numerical value, which is then aggregated and weighted to calculate the consumer confidence index. The indicator is extracted using a statistical formula that takes into account the relative importance of the different survey components.
Basic and seasonal adjustments: Survey results are often adjusted seasonally to take into account regular patterns and fluctuations associated with specific times of year. This amendment helps provide a clearer picture of key trends in consumer confidence.
Reports: The Conference Council issues CB consumer confidence data in the form of an index value. The index is usually reported as a key number, representing the overall level of consumer confidence. In addition, sub-indicators may be provided to highlight specific components of consumer confidence, such as current conditions and future outlooks.
The survey methodology aims to capture a broad representation of consumer confidence across the country. Answers are collected and analyzed to provide insight into consumer perceptions, which can be useful for understanding their behavior and predicting economic trends.
Conferencing Board Consumer Confidence Index (CBI) Components
The Conference Board Consumer Confidence Index (CBI) consists of several components or sub-indicators that provide insight into different aspects of consumer confidence. The main sub-indicators include:
Current Situation Indicator:
- Current working conditions: Evaluate consumer opinions about the current business environment.
- Current working conditions: Assessing consumer opinions in the current labor market.
Forecast Index:
- Short-term business outlook: Reflects consumer expectations for business conditions over the next six months.
- Short-term employment outlook: measures consumers’ expectations for working conditions in the near future.
- Short-term income forecast: measures consumers’ expectations regarding their personal income over the next six months.
Taken together, these sub-indicators provide a comprehensive view of consumers’ perceptions and expectations regarding the economy, influencing economic outlook and policy decisions.
US Consumer Confidence Index improves for May
U.S. consumer sentiment improved in May, with the Conference Board’s consumer confidence index rising to 102.00 from 97.5 in April. The forecast index rose to 74.6 from 68.8 in the same period.
Assessing the survey results, “consumers’ assessment of current business conditions was slightly less positive than last month,” noted Dana M. Peterson, chief economist at the Conference Board. “However, a strong labor market continued to enhance consumers’ overall assessment of the current situation. Views on current labor market conditions improved in May, with fewer respondents saying it was difficult to get jobs, outweighing the slight decline in the number of those who said jobs were plentiful.”
The US dollar index recovered from session lows after this report and was last seen losing 0.07% intraday at 104.52.
