# Consumer Confidence

> Consumer confidence surveys measure how households feel about the economy. Learn the Conference Board and Michigan surveys, inflation expectations and market impact.

Source: https://learn.tradelabsai.com/macro/consumer-confidence/  
Track: Economics and Macro · Level: Intermediate · Updated: 2026-10-03  
Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice.  
Cite as: TradeLabs Learn, "Consumer Confidence", https://learn.tradelabsai.com/macro/consumer-confidence/

Consumer spending makes up roughly two thirds of the US economy, so how households feel about their finances matters. Consumer confidence and sentiment surveys ask people about current conditions and their expectations for jobs, income, prices and business conditions. These surveys give early clues about spending and inflation expectations, though the link between what people say and what they actually spend is looser than many expect.

## The main US surveys

| Survey | Publisher | Timing | Focus |
|---|---|---|---|
| Consumer Confidence Index | The Conference Board | Last Tuesday of the month | Weighted toward labour market perceptions |
| Index of Consumer Sentiment | University of Michigan | Preliminary mid month, final at month end | Personal finances, business conditions, buying conditions; includes inflation expectations |

Both have present situation and expectations components.

## Inflation expectations

The University of Michigan survey asks consumers what inflation they expect over the next year and over the next 5 to 10 years. Central banks watch long term expectations closely, because if people expect high inflation, they may demand higher wages and accept higher prices, making inflation self reinforcing. See [Inflation](https://learn.tradelabsai.com/macro/inflation/).

**Example: Expectations move markets**
In June 2022, the preliminary Michigan survey showed long term inflation expectations rising to 3.3%, the highest in over a decade. Federal Reserve Chair Jerome Powell later cited the reading as one reason the Fed raised rates by 0.75 percentage points that month, a larger increase than markets had expected days earlier. The reading was revised down slightly in the final release, but the episode showed how survey data can influence policy. See [The Federal Reserve and the FOMC](https://learn.tradelabsai.com/macro/the-federal-reserve-and-the-fomc/).

## What drives consumer confidence

| Driver | Effect |
|---|---|
| Labour market | Job security and wage growth lift confidence. See [Employment Data and Non-Farm Payrolls](https://learn.tradelabsai.com/macro/non-farm-payrolls/) |
| Inflation | High prices, especially for food and gasoline, hurt sentiment |
| Stock market | Rising wealth can lift confidence among wealthier households |
| Interest rates | Higher borrowing costs weigh on buying conditions |
| Politics and news | Partisan views increasingly affect survey answers |

## Do surveys predict spending?

The relationship between sentiment and spending is imperfect. In 2022, US consumer sentiment fell to record lows in the Michigan survey, yet consumer spending kept growing, supported by strong job growth and savings. Economists sometimes summarise this as "watch what consumers do, not what they say." Spending data such as retail sales and personal consumption are more direct. See [Retail Sales](https://learn.tradelabsai.com/macro/retail-sales/).

Confidence surveys are most useful at extremes and turning points, and as signals of how inflation expectations and labour market perceptions are shifting.

## Confidence as a contrarian signal

Very low consumer sentiment has sometimes coincided with market bottoms, and very high sentiment with late cycle peaks, which leads some investors to treat extreme readings as contrarian indicators. As with most sentiment measures, the timing is unreliable. See [Sentiment Data](https://learn.tradelabsai.com/alternative-data/sentiment-data/).

## Market reactions

Consumer confidence releases usually move markets less than jobs, inflation or PMI data. Larger reactions occur when inflation expectations surprise, or when readings suggest a sharp change in the labour market.

## Surveys in other countries

- **Euro area:** European Commission consumer confidence indicator.
- **UK:** GfK consumer confidence.
- **Japan:** Cabinet Office consumer confidence.
- **China:** consumer confidence index from the National Bureau of Statistics.

## Frequently asked questions

### What is consumer confidence?

A measure of how optimistic households feel about the economy, their finances and the future, based on surveys.

### What is the difference between the Conference Board and Michigan surveys?

The Conference Board index leans more on labour market views; the Michigan index focuses on personal finances, buying conditions and includes inflation expectations.

### Does consumer confidence predict spending?

Only loosely. Spending often depends more on jobs and income than on reported sentiment, though extremes can signal turning points.

Next, learn to read consumer spending directly in [Retail Sales](https://learn.tradelabsai.com/macro/retail-sales/).

## Continue learning

- Next lesson: [Retail Sales](https://learn.tradelabsai.com/macro/retail-sales/)
- Previous lesson: [PMI](https://learn.tradelabsai.com/macro/pmi/)
- Related: [PMI](https://learn.tradelabsai.com/macro/pmi/): PMIs survey purchasing managers about business conditions, giving an early read on growth. Learn how ISM and S&P Global PMIs work, the 50 line and market reactions.
- Related: [Retail Sales](https://learn.tradelabsai.com/macro/retail-sales/): The retail sales report tracks monthly US spending at stores, restaurants and online. Learn headline vs control group, revisions, inflation and market reactions.
- Related: [Inflation](https://learn.tradelabsai.com/macro/inflation/): Inflation is the rate at which prices rise over time. Learn its causes, how it is measured, how central banks respond and how it affects stocks, bonds and gold.
- Related: [Sentiment Data](https://learn.tradelabsai.com/alternative-data/sentiment-data/): Sentiment data measures how optimistic or fearful investors are. Learn survey, positioning, options and crypto sentiment indicators and how to use them.
- Related: [Recession Indicators](https://learn.tradelabsai.com/macro/recession-indicators/): Recession indicators like the yield curve, the Sahm rule and leading indices have warned of past downturns. Learn how each works, its record and its limits.
- Related: [GDP](https://learn.tradelabsai.com/macro/gdp/): GDP measures the total value of goods and services an economy produces. Learn how it is calculated, real vs nominal GDP, release timing and how markets react.