Consumer Confidence
Consumer Confidence Index
Release date:Monthly, on the last Tuesday of the month
Timeoutput:At 11 a.m. ET
Published:Conference Board Inc
About5000 families. Respondents are asked to rate the current and future economic conditions of their country using parameters such as job opportunities, business conditions, and the state of the economy as a whole. The survey touches upon five key points:
Current business conditions
Current conditions of employment
Business conditions for the next 6 months
Conditions of employment for the next 6 months
Family's total income for the next 6 months
For each question, the relativea value equal to the ratio of the proportion of positive answers to the sum of the proportions of positive and negative answers. It is then compared to the corresponding 1985 annual average (which is considered the baseline) and computed as the average of five questions. The starting point is taken to be 100.
Release time
Consumer Confidence Index is publishedmonthly, on the last Tuesday of the month and represent data for the current month. The news will be released at 11:00 am ET. Results for the data can be found on the Conference Board Inc website, or from independent news sources such as Bloomberg and Thomas Reuters.
Interpreting data
After the global financial crisis, the market becamepay particular attention to changes in consumer confidence, and now these data have a very significant impact on trading, unlike pre-crisis times. And there is a reasonable explanation for this. The Consumer Confidence Index is a leading indicator of consumer spending, and consumer spending drives much of overall economic activity and GDP.
If consumers are unsure abouteconomic prospects, they tend to cut their costs, which negatively affects business and manufacturing and leads to job losses. As a result, people who have been left without work are even more "pressed" in their expenses, which creates a vicious circle and can greatly harm the economy.
If the index is betterexpectations means consumer confidence at high levels, which is a positive factor for the dollar. Conversely, if the index data falls short of market forecasts, it could negatively affect consumer confidence and put pressure on the US currency.
Conclusion
To trade on news for thisindicator, traders should base it on the degree of deviation from the expected result. The more the actual indicator deviates from the expected one, the greater the impact it will have on trading.
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