Web Trader MT5
Survey of approximately 3000 U.S. households, monitoring consumers’ views on prevailing conditions and prospects for the 6-month period ahead. It is a report of the Conference Board, which includes evaluations of the state of business conditions, availability of employment, and expectations of income.
The CCI is one of the most closely monitored indicators of US consumer spending (about 70% of GDP). A rise in confidence is often associated with discretionary spending; a fall in confidence is often associated with an increase in precautionary saving.
There are two sub-indices that are more important than the headline: the present situation component and the expectations component. Disagreements can also offer extra hints when they agree on the current outlook, but disagree on what they expect in the future; it’s a sign that the cycle may be turning, and the confidence in the present outlook is likely to stay high.
Example: Consumer confidence plunges when energy prices rise, and the employment market cools. Retailers use the numbers as an excuse to reduce inventories. Traders who took the beat from the previous week’s survey and sold off discretionary consumer stocks are getting repaid as official GDP data eventually validates the spending slowdown that the survey was signaling.
