Save US Consumer Confidence

There are two consumer confidence indices, released respectively by The Conference Board and University of Michigan, both of which provide a comprehensive view on the prevailing economic conditions, income, income expectations and consumer sentiments towards shopping.

The main distinction between the University of Michigan Consumer Sentiment Survey and the US Consumer Confidence Questionnaire is that the former focuses on how consumers feel about the consumption of "durable goods", while the latter is closely related to "general consumption" and "employment."

When the gap between the two results widens, it more often than not indicates that Fed is expected to raise interest rates due to better economic outlook. Then, heightened pressure on the borrowers will lead to a reduction in consumption of durable goods. UM's consumer sentiment might fall, while consumer confidence remains high as the labor market, general consumptions, and stock market are still strong.

After several rate hikes, the impact on the consumption of durable goods extends. Companies begin to cut down investment and personnel cost, causing the labor market and the consuming power in the private sector to stagger. When consumers are losing confidence, the gap between the two survey results narrows down, and stock market is often faced with downward pressure.