What does consumer confidence indicate?

Consumer confidence is a measure of the extent of optimism or pessimism that consumers feel about the overall state of the economy and their personal financial situations. When consumer confidence is high, it suggests that individuals are feeling secure in their economic status and are more likely to make purchases, thereby driving economic growth. Conversely, low consumer confidence indicates that people may be feeling uncertain or pessimistic, which can lead to reduced spending and a potential slowdown in economic activity.

This measure acts as a leading indicator for economic trends, reflecting individuals' willingness to spend money, which is essential for stimulating economic growth. While the willingness to spend, economic stability, and financial literacy are all important factors in understanding consumer behavior and the economy, the core of consumer confidence revolves around the general sentiment regarding economic conditions.