Consumer Confidence Index (2010-2021)
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. The higher the index is, the better the economic situation and outlook.
The decade started off with an index of 71.8 in 2010 before falling to 67.3 in 2011. Up until 2019, aside from a slight dip of 1.0 from 92.9 in 2015 to 91.9 in 2016, the US consumer index had been increasing steadily.
Following the outbreak of COVID-19 in 2020, the US consumer sentiment was measured at 81.6, a 14.4-point fall from 2019.
Here’s a closer look at how US consumer confidence has evolved since the start of 2020.
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US Consumer Confidence in 2020 and 2021
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 an 11.9-point decrease from the previous month. The index continued to fall, tumbling yet another 17.3 points to 71.8 in April, the index’s lowest point so far this year.
Even though October 2020’s index is at 81.8, the highest since March, most consumers were still wary and preferred to be more conservative with their spending.
Around the turn of the new year, US consumer confidence held relatively steady. It ended the year off with 80.7 in December 2020 and dipped slightly to 79.0 in January 2021.