Consumer Confidence Index

Categories : Category Insights | Economic Indicators Published on : Jul 27 2017

The Consumer Confidence Index (CCI) was in the doldrums ever since the dot com bubble burst; however, the CCI fell further starting in late 2007 before plunging precipitously in 2008. The sharp drop was triggered by the collapse of two stalwarts of the financial sector, Bear Stearns and Lehman Brothers, which revealed an unexpected weakness in the US economy and a bubble in the housing market. Consumer confidence deteriorated as Americans had their retirement accounts and savings crushed by plunging asset values.

Expectations for the future remained bleak through early 2009, with soaring unemployment dampening optimism across the nation. But in the second half of 2009, a stabilizing housing market and stock prices regaining some of the ground lost during the collapse led consumer confidence to turn the corner. This trend of improving consumer confidence persisted through 2010 as the economy regained traction and companies reported renewed profitability, resulting in a 20.0% higher average in the CCI compared to 2009. Moreover, the strength in consumer confidence in recent years has been encouraging. In the larger historical context, as the S&P 500 exploded over the start of 2017, CCI has grown significantly, hitting its highest levels since prior to the dot com bust.



Forecast

Over the five years to 2023, IBISWorld expects consumer confidence to fluctuate in stride with the economy and employment. Returning to work and regaining a steady income will make individuals considerably more positive about future prospects and, thus, amiable to large purchases. While IBISWorld expects this to be the general trend over the outlook period, the high level of volatility inherent in this index makes it likely that individual months and years will vary substantially from projections.


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