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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
A measure of how optimistic people feel about the economy and their finances.
Why It Matters
Consumer spending drives 70% of the U.S. economy, so confidence matters enormously. When people feel good, they spend; when scared, they save. The Conference Board surveys 5,000 households monthly. A sharp drop in confidence often precedes recessions - people feel trouble coming before it shows in economic data.
Key Points
- Index above 100 = optimistic, below 100 = pessimistic
- Big drops often precede recessions and market corrections
- Retail stocks are especially sensitive to consumer confidence
Related Terms
Common Questions
A measure of how optimistic people feel about the economy and their finances. Consumer spending drives 70% of the U.S.
Consumer spending drives 70% of the U.S. economy, so confidence matters enormously. When people feel good, they spend; when scared, they save. The Conference Board surveys 5,000 households monthly. A sharp drop in confidence often precedes recessions - people feel trouble coming before it shows in economic data.
Index above 100 = optimistic, below 100 = pessimistic
Big drops often precede recessions and market corrections
Retail stocks are especially sensitive to consumer confidence