I think we can all agree that the economy isn't what it used to be. Will the economy come back? Will unemployment ultimately disappear? Where will we be this time next year? Watch the news and you can learn a thing or two about economic recovery. Whether we realize it or not, the evening news can influence our spending habits. The news doesn't even have to directly affect us either. Unrest in the Middle East is the prime example. Although Middle Eastern violence is thousands of miles away from most of us, once it airs on the evening news it becomes our news. It dictates a portion of our personal economy. The term used to describe this phenomenon is consumer confidence.
The United States consumer confidence index (abbreviated CCI) is an indicator designed to measure consumer confidence in retail purchases, which is defined as the amount of optimism on the state of the economy that consumers are expressing through their spending and saving activity. Consumer confidence fluctuates in accordance to world events and daily news. The CCI has been around since the 1960's. It is issued monthly in the United States and can vary greatly. Major manufacturers, retailers, and banks monitor changes in the CCI in order to factor in the ever-changing data in their financial decisions. While minuscule index changes are often dismissed as being inconsequential, larger shifts in the index often indicate a change in the direction of the economy. The CCI can vary substantially based on the previous month's news stories.
Middle Eastern peace has traditionally affects oil prices. Slumping automobile sales usually signal a ripple effect in various metal related industries.Rising health care costs typically spark concern in older citizens. Weather events including hurricanes, tornadoes, and blizzards rarely boost consumer confidence. The constant woes of the banking industry will typically frighten home buyers. It seems as though virtually every news story can have an impact on consumer confidence on an individual basis.
It is always easier to find reasons to hang on to your money than it is to find the desire to spend it. Retail shopping at the local mall or grocery shopping for your weekly food supply is one thing, purchasing a new vehicle or a primary residence is another. Whether you realize it or not, your personal consumer confidence can easily be swayed based on world news and your own opinion of the economy around you.
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