Here's How Analysts Figure Out The Consumer Confidence Index

A co-op shopper bags his groceries while a fellow co-op member works the cash register in New York City.

Photo: Chris Hondros/Getty Images

The Consumer Confidence Index is released each month by the Conference Board, a private research group.It is based on a survey of five questions that haven’t changed since the index started in 1967.

The Conference Board surveys about 500 people during the first two weeks of the month, and then comes up with a preliminary number.

That number is revised in the following month’s report to reflect a total of about 3,000 people.

The revision isn’t statistically significant, says Lynn Franco, director of The Conference Board Consumer Research centre. For example, September’s preliminary figure, announced last month was revised to 46.4 from 45.4.

Each question counts for 20 per cent of the index. The responses are used in figuring out the index’s two main components:

¬†PRESENT SITUATION: Assesses how people feel about the economy now. It’s made up of two questions, one that asks if the person thinks business conditions are “good,” ”bad” or “normal,” and one that asks whether jobs are “plentiful,” ”not so plentiful” or “hard to get.”

¬†EXPECTATIONS: Assesses respondents’ outlook for the next six months. It asks similar questions to the Present Situation about business conditions and job outlook. It also adds a third question on whether the person thinks his or her income will increase, decrease or stay the same.

The index hit its all-time high of 144.7 in 2000. Its record low was 25.3 in February 2009.

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