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The Importance of the Consumer Confidence Index

By
Mortgage and Lending with Canopy Mortgage, LLC NMLS 124492

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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Comments(2)

Cherimie Crane
Cherimie Crane & Associates - Beaufort, SC
Thank you for explaining that! I look forward to your posts....I always learn something.
Jan 29, 2008 08:37 AM
Jo Ann Norton
Coldwell Banker Riviera Realty - Lacey Township, NJ
Ocean County NJ Real Estate

Okay, but does anyone really believe that a modest improvements in the CCI will directly effect the housing market and that will translate to more buyers in the market?  I'm not sold on that thought.

That said, thanks for the information.

Jan 29, 2008 08:58 AM