Consumer Confidence Index (2010-2020)
One of the most important things to always be on top of as an entrepreneur is the state of the economy—both present and future. Not only does it tell you how it may impact your business, but it can also arm you with the information you need to adjust your strategy going forward.
The consumer sentiment index is a common measure of this. According to the US consumer sentiment index by the University of Michigan, US consumer confidence has generally been growing over the past decade.
The index is calculated by asking consumers about their current financial situation, benchmarked against what it was a year ago, as well as their expectations over the coming year. The number of negative responses is then compared against positive ones, and the higher the index is, the better the economic situation and outlook.
In 2019, the US consumer sentiment was measured at 96.0, a slight 2.4 percent drop from the 98.4 measured in 2018, which, incidentally, was the highest in the past decade.
The decade started off with an index of 71.8 in 2010 before falling to 67.3 in 2011. Since then, aside from a slight dip of 1.08 percent from 92.9 in 2015 to 91.9 in 2016, the US consumer index has been increasing steadily.
US Consumer Confidence in 2020
The US consumer confidence index in 2020 started off on a high note, coming in at 99.8 and 101 in January and February respectively.
But when the coronavirus pandemic hit, it forced businesses to close, resulted in layoffs, and caused states to go into lockdown. As a result, consumer sentiment fell.
In March, the US consumer confidence index was registered at 89.1, marking a 11.78 percent decrease from the previous month. The index continued to fall, tumbling yet another 19.42 percent to 71.8 in April, the index’s lowest point so far this year.
Even though October’s index, at 81.8 percent, is the highest in seven months, most consumers are still wary and prefer to be more conservative with their spending.
In fact, 84 percent of US families say they plan to either maintain or reduce their holiday expenditure, with nearly one in six of them (57 percent) expecting COVID-19 to continue impacting their finances for at least another four months.