Definition:

Economists are always trying to gauge the confidence level of consumers because they are the end buyer of retail goods and services. If the overall mood of consumers is upbeat and they are encouraged about future economic conditions, then it is not unreasonable to assume that they will spend more, travel, and invest. Conversely the opposite is true and any downturn in household confidence could lead to harsh times. There are three main confidence indexes published each month by the following institutions:

1. Consumer Confidence Index: Conducted by the Conference Board and the questions are geared toward current labor market conditions; 5000 households are surveyed

2. University of Michigan’s Consumer Sentiment Survey: Attempts to uncover household attitudes about future financial and income situations; 500 households is the sample size

3. ABC News/Money Consumer Confidence Index: Only asks 250 people about current economic conditions therefore is not used as a leading indicator

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