Consumer Confidence
A survey-based measure of households' optimism about the economy — a leading indicator of consumer spending, which drives ~70% of U.S. GDP.
Consumer confidence indexes (the Conference Board and University of Michigan are the main U.S. measures) survey households about current and expected economic conditions. Since consumer spending represents roughly 70% of U.S. GDP, confidence is a forward-looking proxy for spending intention.
A sharp drop in confidence — even before hard data weakens — can be a leading indicator of a slowdown. Retailers, automakers, and discretionary consumer stocks are particularly sensitive. Central banks also track confidence as a soft input for their economic outlook.
Related Terms
Business Cycle
The recurring sequence of economic expansion, peak, contraction, and trough that drives sector rotation, earnings cycles, and asset class returns.
IntermediateGross Domestic Product (GDP)
The total monetary value of all goods and services produced within a country in a given period — the headline measure of economic size and growth.
BeginnerLeading Indicator
An economic data point that tends to move before the broader economy — useful for anticipating turning points before they show up in lagging hard data.
IntermediateNon-Farm Payrolls (NFP)
Monthly count of new U.S. jobs added outside the farm sector — the most volatility-generating data release on the macro calendar.
BeginnerPurchasing Managers Index (PMI)
A monthly survey of business activity across manufacturing and services — a leading indicator that moves markets before hard data arrives.
IntermediateRecession
A significant economic contraction — commonly defined as two consecutive quarters of negative GDP growth — that hits corporate earnings and risk assets hard.
BeginnerRetail Sales
Monthly measure of consumer spending at the register — a direct read on whether households are putting their money to work.
BeginnerRisk-On
A market sentiment regime where investors favor higher-risk assets — equities, high-yield credit, commodities, and EM — over safe havens.
Beginner