Conference Board Consumer Confidence Index (CCI)

The U.S. Consumer Confidence Index (CCI) gauges the level of optimism consumers have regarding the overall economy of the country, as well as their personal financial situations. The CCI survey is conducted on a monthly basis and includes approximately 50 questions that assess various aspects of consumer sentiment about current and future business conditions, employment prospects, and anticipated family income over the next six months.

This report is highly valued by the Federal Reserve and can significantly influence U.S. monetary policy. The survey involves 5,000 consumers who are asked about their perceptions of the current economy and their spending habits. Participants are also queried about their confidence in purchasing expensive consumer goods. The report differentiates between current feelings and expectations for the upcoming months.

How to Read It:

A neutral level is around 100. Scores below 75 are typically considered weak, while those above 125 are seen as strong. High consumer confidence can drive economic growth, whereas low confidence may lead to an economic decline. A significant drop in confidence may indicate a weakening economy, although the relationship between spending and confidence is not particularly strong. Only changes in the index of five points or more should be regarded as significant. Since the Conference Board surveys a completely new group of individuals each month, the index tends to exhibit more volatility compared to the University of Michigan’s survey, which polls many of the same respondents each month.

Why is it important?

Consumer confidence surveys serve as crucial indicators of the economy's overall health. When individuals feel secure about their income stability, it positively impacts their spending and saving behaviors. A pessimistic consumer can create concerns for investors in U.S. markets, increasing the likelihood of declining interest rates and a weakening economy, both of which can harm the dollar's value. Investors may choose to sell the dollar in search of higher yields and stronger economies elsewhere. Conversely, an optimistic consumer can lead to rising interest rates and stock market returns that are more favorable compared to other countries, resulting in increased demand for the U.S. dollar.

Where to find it?

The Conference Board operates as a subscription-based service, and unfortunately, the data is not available on BabyPips.com’s economic calendar. The easiest way to access it is to search for “Consumer confidence” on Google.

Background:

The Consumer Confidence Index assesses consumer sentiments regarding the economy, employment, and spending. Satisfied consumers are more inclined to shop, travel, and contribute to a robust economy, while dissatisfied consumers tend to be more cautious with their spending, which can negatively impact economic growth. This report can sometimes help predict sudden changes in consumption patterns. Given that consumer spending constitutes two-thirds of the economy, it provides valuable insights into economic direction.

Source:

The Conference Board

Availability:

The report is released at 10:00 am EST on the last Tuesday of the month being surveyed.

Frequency:

Monthly.

Revisions:

Minor revisions may occur as additional survey results are gathered and processed.

Additions:

The Index of Consumer Confidence, commonly known as the CCI or Consumer Confidence Index, is a monthly report published by an independent economic research organization called The Conference Board. The CCI is derived from statistical data collected from 5,000 households and is regarded as an accurate reflection of public sentiment regarding the U.S. economy for that month. It even includes calculations of the number of “help wanted” ads in local newspapers to assess the tightness of the job market.

This measurement is considered highly indicative of the consumption component of the gross domestic product, and the Federal Reserve consults the CCI when making decisions about interest rate changes. The CCI can also influence stock market prices.

The base confidence level of the CCI is established at 100, as determined at the index's inception in 1985. The Conference Board typically announces an economic recession when there are two or more consecutive quarters with confidence levels falling below 100.

The data in the CCI is timely and is viewed as a predictor of business cycle movements. However, it is important to remember that the report is merely a survey and does not provide actual spending data, as it only collects information on “planned spending,” making it unable to accurately forecast future economic conditions.