The Consumer Confidence Index measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. The primary measure shown here is the University of Michigan Consumer Sentiment Index.

Why It Matters

Consumer spending drives about 70% of U.S. GDP, so consumer confidence is a leading indicator of future spending. When consumers feel optimistic, they spend more freely; when pessimistic, they pull back.

Two Key Components

The expectations component is particularly important as a recession predictor.

Market Impact

Higher-than-expected confidence tends to support equities and the dollar, as it suggests robust consumer spending ahead. Declining confidence raises concerns about a spending pullback and potential GDP weakness.