Consumer Confidence Index
The Consumer Confidence Index (CCI) is a monthly survey-based measure published by The Conference Board that assesses U.S. consumers' optimism or pessimism about current economic conditions and their expectations for the next six months, serving as a leading indicator of consumer spending and overall economic activity.
Each month, The Conference Board surveys approximately 3,000 U.S. households on five questions: assessments of current business conditions, assessments of current employment availability, expectations for business conditions six months ahead, expectations for employment six months ahead, and expectations for total family income six months ahead. The answers feed into three sub-indexes: the Present Situation Index, the Expectations Index, and the headline Consumer Confidence Index. A reading above 100 indicates that consumers are more optimistic than the 1985 baseline; below 100 indicates pessimism.
The University of Michigan Surveys of Consumers (often called the 'Michigan Consumer Sentiment Index') is a closely watched alternative that surveys approximately 500 households twice monthly, providing more frequent data. While the two measures often trend together, they can diverge: Conference Board confidence tends to track current labor market conditions more closely (respondents are asked specifically about jobs), while Michigan sentiment tracks consumers' assessment of their own financial situation and inflation expectations.
Consumer confidence matters enormously to markets because consumer spending represents about 70% of U.S. GDP. When confidence is high, households are more willing to make big-ticket purchases (cars, appliances, vacations), take on debt, and invest in financial assets. When it collapses — as it did during COVID-19, when the Conference Board index fell from 132.6 in February 2020 to 85.7 in April 2020 — spending contracts rapidly, dragging the economy with it. The 2022 collapse in confidence (the Michigan index hit its lowest reading ever in June 2022, below even the 2008 financial crisis trough) was driven by surging gasoline and food prices that hit lower- and middle-income households hardest.
Retail companies, auto manufacturers, homebuilders, and travel-related businesses all watch consumer confidence closely as a forward indicator of demand. For stock investors, periods of very low consumer confidence have historically — counterintuitively — offered attractive equity entry points, as the worst sentiment often coincides with market bottoms rather than market tops.