Consumer Confidence Index

The U.S. Consumer Confidence Index ( CCI index of consumer confidence ) measures the propensity of households in the United States. It is published by the independent research institute " The Conference Board " based in New York. The index is in competition with the University of Michigan Consumer Sentiment Index, the Consumer Confidence Index from Thomson Reuters and the University of Michigan.

Concept

The U.S. Consumer Confidence Index (CCI ) is considered a leading indicator of economic development in the United States. To calculate a representative sample of 5000 consumers about their consumption plans, especially in the propensity of durable consumer goods, interviewed. The monthly report, the Consumer Confidence Survey, measures the confidence that households have in the performance of the American economy. Consumer confidence is considered a key indicator of consumer spending, which account for about two-thirds of U.S. economic output. The market research company that conducts the survey for the Conference Board, shipped nationwide 5000 questionnaires to be answered of which about 3500.

The survey consists of five questions on the following topics:

Survey participants are asked every question "positive" to answer " negative" or "neutral". From all the data calculated, the Conference Board two sub-indices, which together form the overall index: the Present Situation index for the assessment of the current situation and the Expectations Index, which includes an assessment of future expectations. Opinions on current behavior for a share of up to 40 percent of the overall index, expectations for future behavior accounts for 60 percent. The preliminary results from the Consumer Confidence Survey are published on the last Tuesday of the month at 10:00 clock EST (16:00 CET clock ).

Assessment

The strengths of the U.S. Consumer Confidence Index (CCI ) is the release of the data for the current month. Consumer confidence is a leading indicator of economic cycles. The information published provide information on the current situation and future expectations of the consumers.

Among the weaknesses of the index heard that the consumer does not have the necessary information to make a correct estimate of the income as the job growth in advance. The monthly report contains information on planned spending, but which are not necessarily made.

In a period of prolonged economic growth with the purchase intentions can lose weight despite falling unemployment, since the strong demand has already been satisfied. In contrast, in the short term may increase with rising inflation, the buying plans, as consumers put in anticipation of rising prices this quickly to avoid the price increase.

The financial markets are sensitive to unexpected changes in the index, it is perceived as an early indicator for economic development as well as looming inflation. CCI and Purchasing Managers Index include also such as the Case-Shiller index, the FHFA House Price Index or the price of oil to the group of indicators that influence their development are identifiable, the stock indices.

In addition to the CCI, there are in the United States, two consumer confidence indices: University of Michigan Consumer Sentiment Index Thomson Reuters and the University of Michigan and the ABC News Consumer Comfort Index for the Washington Post. While the question of the Conference Board focuses on the labor market situation in the other indices, the financial situation of households is at the center. Overall, the data from the Conference Board form a stable connection with the economic data as the indices of the University of Michigan and the Washington Post. The CCI is in the media, business people and consumers in the United States, the most-respected consumer confidence index.

History

Historical Overview

The U.S. Consumer Confidence Index (CCI ) was developed with a base of 100 points for the first time published by the market research institute, " The Conference Board " in 1985 and calculated back to December 1966. The long-time average of the time series of the CCI from 1966 to 2007 is 98.7 index points. The average from 2008 to 2012 is 56.5 index points. The average of the entire time series from 1966 to 2012 is 94.1 index points. According to the Conference Board is the border, where the U.S. economy is in an expansion phase, at 90 points. The average consumer confidence in the phases with stable economic development is 110 points.

In January and May 2000, the CCI reached an all-time high of 144.7 points. During the financial crisis in 2007, the situation worsened in the labor market of the United States. Unemployment grew and the real income of workers declined. According to consumer confidence fell in February 2009 at an all time low of 25.3 points. The two sub-indices of the current situation and expectations experienced a similar development.

The Present Situation Index marked in July 2000 with a record 186.8 points. By December 2009, it dropped to a low of 20.2 points. Deeper he was only during the recession of 1980 until 1982. In December 1982, the situation index marked with 15.9 points an all time low. The Expectations Index rose in January 2000 to a high of 119.1 points. He was only a few points below its all-time high of May 1983 124.3 points. By February 2009, the expectations index fell to an all-time low of 27.3 points.

In February 2011, there were changes in the market research companies and in the methodology. The Nielsen Company took over the monthly survey for the Conference Board of Taylor Nelson Sofres (TNS). Was introduced in a random sample, a subsequent stratification by means of weighting for gender, income, geography and age, as well as the seasonal adjustment method X-12 -ARIMA from the United States Census Bureau. The change in methodology resulted in increased consumer confidence as originally published. The new index was 57.8 points in November 2010 (previously 54.3 points), 63.4 points for December 2010 (previously 53.3 points) and 65.6 points in January 2011 (previously 60.6 points). In February 2011 a value of 72.0 points was determined.

In October 2011, the consumer confidence index fell to 40.9 points, down by August ( 45.2 points) and September ( 46.4 points) for the third month in a row below the limit of 50 points. Consumer confidence so that was on a level that it had during the last recession in 2008 and 2009.

In October 2012, the index rose to 73.1 points, the highest level since February 2008.

For the month of December 2012, a value of 65.1 points was determined.

CCI versus U.S. economic data

Consumer confidence in the United States is closely correlated with unemployment, inflation and the real income situation. There is a strong connection with the consumer behavior. However, the sizes do not necessarily reflect.

Inflation and economic growth is calculated hedonic in the United States since 1996. This attempts to quantify the improvement in quality of products. This leads to lower inflation and depending on the state and industry to estimate up to 30 percent higher growth figures. Social services are often adjusted with the inflation rate. Wage policy is based on the inflation rate. In Germany there was a corresponding revision of the national accounts in 2005.

The following table compares the overall index and the individual indices (position index and expectancy index) with unemployment, underemployment and inflation. In the United States there are six different unemployment rates (U - 1 to U-6 ), the U -3 is considered to be the official number and the U-6, the rate of underemployment reproduces (see Labor Statistics of the United States).

Best and worst months

The table shows the months with the highest and lowest value of the Consumer Confidence Index since 1967.

Annual development

The following table shows the annual high-low and closing prices as well as the annual average of the back-calculated to 1967 U.S. Consumer Confidence Index.

¹ December 31, 2012