Thursday, March 29, 2012

How the Consumer Confidence Index is figured

(AP) ? The Consumer Confidence Index is released each month by the Conference Board, a private research group. It is based on a survey of five questions that haven't changed since the index started in 1967.

The Conference Board surveys about 500 people during the first two weeks of the month, and then comes up with a preliminary number. That number is revised in the following month's report to reflect a total of about 3,000 people. The revision isn't statistically significant, says Lynn Franco, director of The Conference Board Consumer Research Center. For example, September's preliminary figure, announced last month was revised to 46.4 from 45.4.

Each question counts for 20 percent of the index. The responses are used in figuring out the index's two main components:

? PRESENT SITUATION: Assesses how people feel about the economy now. It's made up of two questions, one that asks if the person thinks business conditions are "good," ''bad" or "normal," and one that asks whether jobs are "plentiful," ''not so plentiful" or "hard to get."

? EXPECTATIONS: Assesses respondents' outlook for the next six months. It asks similar questions to the Present Situation about business conditions and job outlook. It also adds a third question on whether the person thinks his or her income will increase, decrease or stay the same.

The index hit its all-time high of 144.7 in 2000. Its record low was 25.3 in February 2009.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-03-27-Consumer%20Confidence-Glance/id-d4c2eadff0e44663a91098d8d00b9566

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