Definition: Consumer sentiment is a measurement of consumers' attitudes regarding their own financial situation, and their feelings about the overall economy in the present and the future.
The University of Michigan calculates the Consumer Sentiment Index number twice monthly from data collected from telephone surveys conducted with 500 U.S. consumers.
Since 2/3 of the U.S. GDP is consumer spending, this index number is considered to be a key economic indicator of spending increases or declines in the short-term. The consumer sentiment figure generally impacts stock market prices positively if sentiment is up, and negatively if sentiment is down, particularly for companies in the retail industry.
Also Known As: consumer confidence
Common Misspellings: consumer sentment, consumr sentiment, consumer centiment
Examples: When economic news is bad, people become fearful, consumer sentiment declines, retail sales decrease, and stock market prices drop. Consumer sentiment is part of a vicious cycle based on moods, feelings and attitudes.
