What is the US CCI?

Each and every month, the US Consumer Confidence Index is released by The Conference Board.

What is the Consumer Confidence Index?

According to The Conference Board's web site, the Consumer Confidence Index is "a barometer of the health of the U.S. economy from the perspective of the consumer." The Consumer Confidence Index was first started back in 1967.

The Consumer Confidence Index is derived from data that is received from the polling of 5,000 American households.

The CCI measures consumer confidence based not only on present day, but also on six months into the future. "Present day" opinion makes up 40% of the weighting of the index, while "future" (6 months down the road) opinion makes up 60% of the index.

Consumer confidence is the measure of the average US consumer's optimism regarding the state of the economy. This is expressed through the saving and spending habits of the average US consumer. Consumers who are worried about the economy will save more, while consumers who are optimistic about the state of the economy will spend more.

The Consumer Confidence Index is benchmarked to 1985. 1985 was chosen because it was neither a trough not a peak in the economy. 1985 has a value of 100.

Because 1985 was chosen as the benchmark, the Consumer Confidence Index can be over 100 and under 100. The last time (as of this article) that the CCI was over 100 was August of 2007.

Because the United States economy is driven by consumers, the Consumer Confidence Index is closely scrutinized by many, including the Federal Reserve. A weak number can be a sign of trouble for the economy, while a stronger number can indicate that the economy is swinging to the upside.

The Conference Board's web site can be found here.