CCI

1) CCI stands for the Consumer Confidence Index. It is one of the most widely used economic indicators to get a gauge on the level of optimism and confidence among US consumers.

Recall that consumer spending accounts for 2/3 of the US GDP and hence,

getting a gauge on consumer sentiment is integral to understanding and forecasting GDP.

2) Two popular measures of CCI currently exist in the US.

The first is the one published by The Conference Board, an independent research organization.

The second is published by the University of Michigan's institute of social research.

3) Conference Board CCI

a) The Conference Board publishes the Consumer Confidence Index at 10 a.m. ET on the last Tuesday of every month

b) Based on data from a monthly survey from 5000 households.

c) Questions target topics from current employment conditions to future business conditions and estimated family income and wealth.

4) University of Michigan CCI

a) Published every month (typically the first working day).

b) At least 500 telephone interviews are conducted of a continental United States sample.

c) 50 core questions are asked. Questions once again cover topics similar those covered by the Conference Board CCI.

5) The underlying concept is that if the index gives a healthy reading, it means that consumers are confident about their economic conditions and the economy in the future as a whole.

They have a higher level of personal income and thus are willing to spend, not only through quantity but also through quality.

6) Because of the timeliness of its release, it is often considered a leading indicator, showing trends in how the GDP growth rates are going to come in the next quarter.