Consumer Confidence Drives Consumer Spending Index Growth of Consumer Confidence, Employment, and Personal Income 2007 to 2015 YTD
This is the second in a series of four factoids exploring the impact of consumer confidence on a rising demand for consumer products, especially durable goods. Consumer confidence, measured monthly by The Conference Board, is “a barometer of the health of the U.S. economy from the perspective of the consumer”.
Although confidence tends to fluctuate more strongly than actual economic data, the CCI (Consumer Confidence Index) is a lagging indicator in response to several economic catalysts, among them the health of our jobs market, growth in wages, and the overall global political and financial climate.
More than any other indicator, Consumer Confidence tends to mirror the growth in personal income with the CCI responding more sharply to economic downturns. Employment bottomed out in 2010 at an index of 94.4 –6 percent below 2007. (2007 = 100) Since then, the number of employed workers has increased by 8 percent and is currently at an index of 102.5. Personal Income stayed flat during the Recession but quickly gained momentum after 2009 and has increased to 126.8 index – a growth of 26 percent.
Next week’s factoid will show a direct correlation between Consumer Confidence and Personal Consumption, specifically durable goods.
Source: The Conference Board: Consumer Confidence Index, Bureau of Labor Statistics, Bureau of Economic Analysis