Consumer Confidence

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Consumer ConfidenceConsumer confidence measures how people feel about the economy. It tracks the emotions of regular people yet it is a surprisingly important leading indicator and a fairly reliable predictor of where the economy is headed. When people feel good about their financial situation, they spend and invest more and the economy grows. When people feel more pessimistic, then they tend to tighten purse strings and make more conservative investments and the economy slows.At some point, the fundamental health of the economy simply does not matter. How people feel about the economy becomes a self fulfilling prophecy.You can follow consumer confidence numbers at The Conference Board. The Conference Board Consumer Confidence Index® declined by 5.4 points in January to 104.1 (1985=100). December’s reading was revised up by 4.8 points to 109.5 but was still down 3.3 points from the previous month.