Average Consumer Expectations
Overview
Average consumer expectations for business conditions is one of the 10 parts of The Conference Board’s Leading Economic Index. It draws on consumer surveys about the economy.
These surveys inquire about consumer perspectives on inflation, unemployment, and personal financial situations in the near term.
Why This Matters
This metric holds significance for several reasons:
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Direct Impact on Economic Output: Consumer expectations influence spending. Consumer spending is about two thirds of US GDP.
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Spending Behaviour: When consumers feel optimistic about economic direction, they increase spending, driving demand for goods and services. Businesses respond by increasing production and investing in new capacity, creating jobs.
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Economic Downturns: Declining consumer expectations lead to reduced spending, prompting businesses to cut production and potentially lay off workers, creating a self-reinforcing economic contraction.
Track This Yourself
For easier tracking, add the US recession indicator for visual reference.