Consumer Confidence

Consumer confidence surveys ask people questions such as whether they think their finances will improve, whether now is a good time to make major purchases, and how they expect the economy and job market to perform.

Consumer spending makes up a large share of economic activity in many countries, so household mood matters. When people feel confident, they tend to spend more and borrow more, supporting economic growth. When they feel worried, they tend to save more and delay major purchases, such as cars, holidays and home improvements.

For example, a sharp drop in consumer confidence following news of job losses or rising prices might signal that retail sales and economic growth will weaken in the coming months.

Consumer confidence is often treated as a leading indicator. However, the link between what people say in surveys and what they actually do is not always strong. Confidence can be affected by news headlines, political events and stock market swings, while actual spending depends more directly on incomes, employment and access to credit.