Blog Post 2

CONSUMER CONFIDENCE
1. Who do you believe would be interested in this statistic?
a. Everyone needs to be interested in this statistic. Whatever the consumers expect from the market and are willing to put into it at any given time is something that affects the entire market. Producers are interested in how much they can expect to make, suppliers are interested in when to increase or decrease production, and stockholders are interested in when a stock is about to rise or decline. Personal consumption accounts for 2/3 of our total GDP, so the confidence of the consumers has an enormous impact on the economy
2. How is this statistic collected? (Who? How frequently?)
a. The Washington Post-ABC News Consumer Comfort Index is a rolling average based on telephone interviews with 1,000 randomly selected adults. It covers the previous four-week period. Interviewees are asked about the state of the nation’s economy, the state of their personal finances, and whether they are buying things at the current time.
b. The Conference Board Consumer Confidence Index: This survey is based on a representative sample of 5,000 U.S. households. Interviewees are asked about their short-term outlook, their current financial conditions, and their perceptions of the job market.
c. The Thomson Reuters/University of Michigan Consumer Sentiment Index: At least 500 telephone interviews are conducted each month in the United States. Interviewees are asked 50 core questions such as how they felt financially six months ago, how they feel about their current conditions, and what they expect six months in the future.
3. Include the most recent number for the statistic and enough information to put it into context.
a. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment improved to 74.5 at the end of December 2010, its best level in six months. This number was up from 71.6 in November and 67.7 in October. While it may have benefited from holiday sales, overall consumers were expecting favorable news for the upcoming year. While their views on their financial situations remained negative, job gains are on the horizon and the economy can expect an increase in consumer spending as a result of an increased consumer confidence index.
4. References/Links
a. http://www.bloomberg.com/news/2010-07-16/consumer-confidence-declines-more-than-forecast-to-66-5-in-michigan-index.html
b. http://wallstcheatsheet.com/breaking-news/economy/your-cheat-sheet-to-consumer-confidence.html