Now this is truly an “eye crosser” candidate. To me, the amateur investor, the two concepts surely seem interchangeable. They sort of “sound the same.” But there is a difference between them. The intent of both survey/indices is to track consumer buying habits and attitude or feelings about the current economy. Here are two differences between the survey/indices:
- Consumer Confidence index(r):
- Developed by the Conference Board
- Data developed through mail-in surveys to 5,000 households
- Consumer Sentiment index:
- Developed by the University of Michigan
- Data developed by telephone survey of 500 people
More details:
- The University of Michigan Consumer Sentiment Index
University of Michigan Surveys of Consumers is a consumer confidence index published monthly by the University of Michigan. The index is normalized to have a value of 100 in December 1964.
View the current University of Michigan survey press release here.
Definition of “Consumer Sentiment:”
A statistical measurement and economic indicator of the overall health of the economy as determined by consumer opinion. Consumer sentiment takes into account an individual’s feelings toward his or her own current financial health, the health of the economy in the short term and the prospects for longer term economic growth. Source: Consumer Sentiment Definition | Investopedia
- The U.S. Consumer Confidence index(r) (CCI) is an indicator designed to measure consumer confidence, which is defined as the degree of optimism on the state of the economy that consumers are expressing through their activities of savings and spending.
Definition of Consumer Confidence Index(r) – CCI
A survey by the Conference Board that measures how optimistic or pessimistic consumers are with respect to the economy in the near future.
Source: Consumer Confidence Index(r) (CCI) Definition | Investopedia
Read more: What’s the difference between consumer confidence and consumer sentiment?
In 2006, the Philadelphia Federal Reserve Bank issued a newsletter called Business Review covering the topic: Consumer Confidence Surveys: Can they help us forecast consumer spending in real time? Below is a link to the newsletter:
PDF URL:
- Dean Croushore, “Consumer Confidence Surveys: Can They Help Us Forecast Consumer Spending in Real Time?” Federal Reserve Bank of Philadelphia Business Review, Third Quarter 2006.
Philadelphia Fed: https://www.philadelphiafed.org/research-and-data/real-time-center/research
Author note: Any updated facts appreciated since this is an overview posting.
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[…] Is it Consumer Confidence or Consumer Sentiment […]
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[…] number just recently released. As I have previously posted in my blog, here is a small tutorial on the difference between “consumer confidence” vs. “consumer sentiment.” […]
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