Consumer Confidence & Sentiment Surveys

Overview

Consumer confidence surveys from the Conference Board and University of Michigan measure household optimism about the economy and provide insight into future spending patterns. They serve as a leading indicator for retail and discretionary sectors, making them essential reading for equity investors and macro traders alike. Declining confidence during a tight labour market is a warning sign that consumers are seeing cracks before the hard data confirms a slowdown. The Michigan survey's inflation expectations component is closely monitored by the Fed and can move bond markets — track the release dates on our economic calendar.

Key Takeaways

• The Conference Board Consumer Confidence Index surveys 5,000 households monthly.
• University of Michigan Consumer Sentiment includes 1-year and 5-year inflation expectations.
• High consumer confidence → higher spending → positive for GDP and equities.
• Declining confidence during low unemployment is a warning sign — consumers see cracks before data confirms.

Practical Tips

• The Michigan survey's inflation expectations component is closely watched by the Fed.
• A divergence between confidence and hard data (spending, employment) often resolves with confidence leading.
• Consumer discretionary and retail stocks are most sensitive to confidence shifts.