money What is the Consumer Confidence Index? Yahoo Finance explains
As investors gear up for a busy week of economic data releases, it's important to stay informed on what these data sets reveal about the economy and how they impact the market. March's Consumer Confidence Index print was released Tuesday morning by the Conference Board, falling just short of expectations.
Yahoo Finance Anchor Brad Smith breaks down what the Consumer Confidence Index means and how it can impact investors directly.
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Editor's note: This article was written by Nicholas Jacobino
Video Transcript
BRAD SMITH: We begin with some fresh data today. It's been a busy week filled with a wide range of economic indicators, and it's all punctuated on Friday by personal consumption expenditures, or known in your hood as PCE. This is the Fed's preferred inflation gauge. Out this morning, we also got another read on the consumer, consumer confidence, and this is why it matters for you. You may be asking yourself, am I putting enough into my savings account, or will the economy improve more soon? Well, the consumer confidence index is a widely followed economic indicator that measures the level of optimism or pessimism US consumers have over the state of the economy.
The survey is administered by the Conference Board and is based on a monthly survey of 3,000 households across the United States. These questions cover consumers financial situations like their income expectations, purchasing behavior, and even job prospects. Responses are then weighted and combined to create a composite index number.
The index is benchmarked at 100 so that reading above 100 it signals that consumers are more optimistic, while a reading below 100 suggests increased pessimism. Now the consumer confidence for the month of March that came in at 104.7, that fell short of Wall Street consensus expectations, but signals that the consumer remains strong despite sticky inflation.
