Forex glossary
Consumer Sentiment Index
Consumer sentiment indicators summarize household survey responses about finances, economic conditions and expectations. Individual surveys, including the University of Michigan and Conference Board measures in the US, use different questions and methods. Improving sentiment is not a measure of spending or a guarantee of currency appreciation.
Illustrative example
How does it work in practice?
Suppose a comparable sentiment index rises from 70 to 75 points. That is a five-point improvement in the survey reading; it does not show that retail sales increased by 5%.
A case to work through
Preliminary and final readings
In a fictional series, an index is initially 70, finally 72, and 73 in the next final monthly reading.
- The revision within one month is +2 index points.
- Comparing successive final months gives +1 point.
What follows? Record each vintage and compare equivalent observations.
Example boundary: The index alone does not calculate actual spending growth.
A useful distinction
Consumer Sentiment Index / Retail Sales
Sentiment surveys assessments; retail sales measure sales values within specified coverage.
Check your understanding
Separate a revision from a change between successive months.
Show the answer and explanation
A 2-index-point revision
Both readings concern the same month.
Publication, units and interpretation
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Related terms
Sources and documentation
- Surveys of Consumers – University of Michigan
Separates sentiment, current conditions, expectations and preliminary versus final releases.
Document read: - conference-board.org
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.