Consumer Confidence Index (CCI) is the culmination of a monthly survey of 5,000 households in order to understand the level of consumer sentiment towards the current economic conditions (40%) and future expectations (60%). The CCI is extremely important due to the fact that consumer spending accounts for nearly 70 percent of the gross domestic product (GDP).
Take this one step farther. GDP is measured on a quarterly basis and gives us an understanding if the economy is in bull or bear market. This then determines which direction the FOMC will take on monetary and fiscal policy that will ultimately tighten or loosen the flow of money.
Consequently, the CCI could be described as the underlying engine that gauges consumers pocketbooks. That is why the CCI is so important.
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