Consumer Confidence

What is Consumer Confidence?

Some Arabic media call this gauge euro area consumer confidence, a monthly gauge of household mood across the area. It is published by the European Commission DG ECFIN, the Commission economics arm, as part of its harmonised business and consumer surveys. The programme started decades ago and later extended to consumers, with the adopted mix built on 4 questions about past and outlook. The survey covers households through national institutes using shared questions, with states weighted by private consumption shares.

It tracks sentiment, not actual spending, so it never equals retail sales or private consumption. It never measures business mood or economic sentiment gauges, and never inflation or jobless views. The flash is an advance estimate from partial replies, later replaced by full results.

When is it released and what happens each release?

Fieldwork often runs in weeks 2 to 3 of each month, with consumer replies due 7 working days before month end. It comes in two parts: a flash estimate around day 20, then full results 2 working days before month end. The year end release shifts to the start of the next year, while some releases add wider survey sets and investment questions. The flash is short, with balances and point moves plus a chart against the long term average. The full set adds sector gauges and detailed tables.

Full results replace the flash, while past values can shift a little from seasonal smoothing refreshed once per year.

What moves Consumer Confidence?

Confidence shifts with views on money, the economy and buying plans, a mean of 4 equally weighted balances.

• Past household finances Q1: views on how the household situation changed over the past 12 months.
• Expected household finances Q2: hopes for the household position over the next 12 months.
• Expected economy Q4: hopes for the country economy over the next 12 months.
• Major purchase intentions Q9: plans to spend on large goods like furniture and devices over the next 12 months.

Moves read in points and shifts across months against the long term average, never against 0. Scores above the average show stronger than usual trust, while scores below show weaker than usual trust. Record notes are plain facts, never publisher lines, with no buy or sell rule in the method.

How is Consumer Confidence calculated?

1. Answer shares: each question sorts replies into 6 option shares, with do not know apart, summing to 100.
2. Balances: each balance nets firm shares against weak shares in points, giving mild replies half weight through 1/2.

Shares of 3% plus 12% plus 40% plus 25% plus 15% plus 5% give -18.5 points.

1. Country weighting: area shares weight state shares by consumption, smoothed over 3 years.
2. Seasonal smoothing: balances smooth for seasonal shapes after pooling, with Tramo-Seats models kept once per year.
3. Composite: the mark is the mean of the 4 adjusted balances, kept in points with no scaling.

Balances of -18.0 plus -18.5 plus -20.0 plus -14.5 give -17.8 points, as CCI = (B_Q1 + B_Q2 + B_Q4 + B_Q9) / 4. Scale runs from -100 to 100, where 0 is pure balance, never a trade line.

Key point: a weak score never signals shrinking spend, since 0 is pure math, never a slump line. Read it with its average and past moves, since it tracks mood, not cash.