Consumer Sentiment

Companies expand, and companies contract. Companies hire, and companies fire. But how do they know when it's time to make those decisions?

A lot of it starts by reading the tea leaves on the economy. One of the top indicators used by companies and economists is a measurement of Americans’ morale on the state of the U.S. economy. After all, consumer purchases are roughly 70% to 75% of U.S. GDP.

If Americans aren’t confident about the economy, they’re probably not buying cars, new phones, or that salad-lettuce-chopping device that keeps popping up on CNBC ever night at 1 a.m.

Consumer sentiment is expressed in two monthly reports based on survey data. Americans, in their infinite desire to fill out forms and answer questions, take time out of their schedule to offer their views to the Conference Board for its Consumer Confidence Index, and to the University of Michigan’s Consumer Sentiment Index.

The data is a mishmash of sentiment on current and future business conditions, job prospects, employment conditions, and family incomes. Most developed economies also have their own consumer confidence measurements, while Nielsen has a Global Online Consumer Survey.

If you’re ever looking for help falling to sleep, that report is a better solution than Ambien.