Consumer Sentiments and Consumer Confidence

Who publishes Consumer Sentiment Index?
University of Michigan

Who publishes Consumer Confidence Index?
The Conference Board

Note: We just established that we’re talking about two separate indexes. Both measure consumers’ state of mind as it relates to the economy. The Consumer Sentiment is more focused on individual household finances, while the Consumer Confidence questions place a greater emphasis on employment and labor market conditions.

Both of these indexes should be used in conjunction with other economic data such as CPI, PPI, and GDP because by nature, these two indexes are based on subjective data received through questionnaires.

The methodologies to calculate the indexes are on the respective websites and out of the scope of this post.

Usually, higher index scores indicate a better economic situation. That being said, in addition to the absolute amount, the trend is also important. So declining sentiments provide a signal that should be viewed in conjunction with other indicators. Lastly, what we need to remember is that this index reflects in part how consumers are feeling, and that (feeling) is subjective by nature, and we should be cognizant of that.

Below is the screenshot of the data published by the University of Michigan: