Is Consumer Confidence really that important of a number?

ChuckF answered 3 months ago …

According to Yahoo! Finance, Consumer Confidence merits a B- (on the A - F grade school) in terms of importance. Here's an excerpt:

"The Conference Board conducts a monthly survey of 5000 households to ascertain the level of consumer confidence. The report can occasionally be helpful in predicting sudden shifts in consumption patterns, though most small changes in the index are just noise. Only index changes of at least five points should be considered significant. The index consists of two subindexes - consumers' appraisal of current conditions and their expectations for the future. Expectations make up 60% of the total index, with current conditions accounting for the other 40%. The expectations index is typically seen as having better leading indicator qualities than the current conditions index. "

URL: http://biz.yahoo.com/c/terms/conf.html