What is it?
The Conference Board surveys (or contracts the survey of) 5,000 households each month. In the survey, participants are asked about their assessments of current economic conditions and their expectations for conditions in the future. The 'future expectations' subindex is considered to be a better indicator of near-term spending, and it is given a 60% weight in the Index. The 'present conditions' subindex is weighted at 40%.
Consumer confidence surveys such as this one are watched carefully, because they are thought to indicate upcoming economic activity levels. There are many, though who doubt the ability of such surveys to reliably predict spending.
The Index can sometimes be helpful in predicting sudden changes in consumption patterns. Most agree, though, that only significant shifts in the Index (say 5 points or more) are worth attention.
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