Consumer confidence, or a consumer’s evaluation of their own economic situation and the expectations of general economic trends, is of interest to a broad range of business firms, financial institutions, federal agencies and academia. Consumer confidence data from the University of Michigan’s Surveys of Consumers are available on STAT-USA®/Internet™ and the Economic Bulletin Board (EBB)®. Each month, data from three summary indices (Consumer Expectations, Current Conditions, and Consumer Sentiment) are made available, typically on the first Monday of the month.

The Index of Consumer Expectations, a summary measure of expected economic trends, is an official component of the much-watched Index of Leading Economic Indicators. The Index of Current Conditions summarizes trends in consumers’ evaluations of their present economic situation, and the Index of Consumer Sentiment summarizes overall trends in both current and expected economic conditions.

The surveys were initiated at the Survey Research Center, University of Michigan in 1946. The Survey Research Center is a recognized leader in the development and use of scientific survey methods.

The Surveys of Consumers pioneered the development of consumer confidence measures and their use in forecasting. It includes a comprehensive array of survey measures. Each survey contains approximately fifty core questions, each of which tracks a different aspect of consumer attitudes and expectations. The core questions cover consumers’ assessments of their personal financial situation, overall economic conditions, and buying attitudes. The core areas are supplemented by special questions on a variety of topical issues and concerns.

Personal financial expectations play a critical role in shaping the content and timing of consumers’ spending and saving decisions. The surveys regularly monitor how consumers assess their financial progress, asking consumers to describe in their own words the most important changes. Separate estimates of expected changes in nominal as well as real incomes supplement the more general overall evaluations of their financial prospects.

Specific questionnaire items provide detailed estimates of expected changes in inflation, unemployment, interest rates, and prospects for economic growth over the short and long term. These measures provide important early indicators of potential concerns such as future income and job security, the impact of inflationary (or deflationary) trends, consumers’ willingness to use credit, and shifts in asset holdings.

Buying attitudes toward vehicles, homes, appliances, furniture, home electronics, and other large household durables are regularly measured. In each area, consumers are not only asked to give their overall opinions, but also are asked to describe in their own words their reasons for holding these views. Documenting shifts in the reasons underlying their buying plans provides the framework needed to understand why consumers react differently to the same market conditions at different times.

Changes in economic policies are important elements in the formation of consumer expectations. The Surveys of Consumers regularly monitor the impact of proposed changes in tax and spending programs, changes in interest rates and credit conditions, and a variety of other policy initiatives. Along with the direct impact on their financial situation, consumers interpret policy changes as signals about future prospects for the overall economy. Moreover, understanding the impact on expectations is critical since consumers often change their spending or saving behavior in anticipation of the actual enactment or change in economic policy.

The Surveys of Consumers regularly include questions designed to monitor the impact of sudden, unexpected changes in the economic and political environment. Importantly, how the unfolding event affects consumer confidence is often a crucial question in determining its ultimate impact on future economic prospects. Not only do the surveys provide immediate feedback on the emergence of unexpected developments, the long history of the surveys enables comparisons to how consumers reacted to similar unexpected events in the past. The data has repeatedly indicated that consumers do not always react as might otherwise be expected.

Richard T. Curtin is the Director of the Surveys of Consumers at the University of Michigan. The surveys have been under his direction since 1976. For more information about the surveys, contact Mr. Curtin via e-mail at curtin@umich.edu