Consumer Confidence

Consumer confidence is what economists call "soft data" — it captures attitudes and feelings rather than hard activity like sales receipts or factory output. Survey organizations ask households questions such as whether they think jobs are plentiful and whether they expect conditions to improve. The results are then combined into a single index number, where a higher reading signals more optimism. Because it reflects sentiment rather than behavior, it can move sharply on news events even before any actual spending changes.

Markets pay close attention to confidence data because consumer spending makes up a large share of economic activity in most developed economies. Economists read a sustained drop in confidence as a warning that households may soon pull back on purchases — which can ripple through retail, housing, and employment. Conversely, a rebound in confidence after a downturn is often treated as an early signal that activity may stabilize. You can see how confidence readings compare across countries on the indicators page.

A common confusion: a high confidence number does not guarantee that spending will actually rise, and a low number does not guarantee recession. Households sometimes feel pessimistic but continue spending anyway, especially if employment and wages remain solid. That gap between what people say and what they do is why analysts typically pair confidence data with hard indicators like retail sales rather than relying on it alone. For context on how this kind of data appears in scheduled releases, check the economic calendar.