Consumer Confidence Index - CCI

Americans buy a lot of stuff when they feel confident about the economy, and their prospects of earning income and keeping a job. Americans pull back and save more when they're concerned about the direction of the economy.

So...how do you know how Americans are feeling when it comes to the economy at any given time? By tracking an Index that some nerd invented, of course.

Enter the Consumer Confidence Index, which is basically a barometer for how much enthusiasm Americans have about the state and direction of business conditions and economic developments for the near future. The CCI is aggregated by the Conference Board, an independent research organization that tracks the sentiment of 5,000 households. The CCI started in 1967, but its benchmark of 100 is tied back to 1985. They claim that this is because the economy was not overheating or underperforming. In the words of Goldilocks, it was “just right.”

Overall, 1985 was a pretty bland year. You’re talking about a year where the top music performed was by A-ha, Wham! and Tears for Fears.

This CCI metric is important to more than just American consumers. It impacts broader sentiment in the stock market and is used by the Federal Reserve when the central bank considers changes to monetary policy.