How To Guide For: A Look At Consumer Confidence

Consumer Confidence Index measures the outlook that consumers have towards the economy and their own personal financial situation. The outlook can be optimistic (high consumer confidence) or pessimistic (low consumer confidence). The level of consumer confidence will be an important factor that determines the willingness of consumers to spend, borrow and save. A high level of consumer confidence will encourage a higher marginal propensity to consumer. A fall in levels of consumer confidence is often an indicator of an economic downturn. There are several factors that affect consumer confidence like house prices, economic news (depressing statistics about global and national economy will reduce confidence and encourage saving), uncertainty (meaning a major political/economic change which can lead to uncertainty which reduces confidence), unemployment (meaning that if there is a fear of rising unemployment it will discourage consumers), inflation (if inflation is high it will reduce confidence), wages (if wages are stagnant it will make people pessimistic), economic growth (meaning if there is a recession consumer confidence will fall. If there is positive economic growth it will improve consumer confidence). To learn more about Consumer Confidence click on the pictures below to read the articles.