Consumer vs. Business Confidence
Confidence data is used as an indicator to predict future commerce. For example, if you’re confident that your personal financial situation will improve tomorrow you may feel encouraged to spend today.
In the confidence game, who is coming out on top: Consumers or Businesses?
Contrary to popular belief, business and consumer confidence levels are at approximately the same level today. However, you can see that consumers are coming off of an extreme high which may be why the current consumer confidence levels feel shockingly low. It’s the same feeling you had at 6 years old when your parents made you leave Splash Mountain to spend the afternoon in the Epcot center.
Nevertheless, the drop may be positively contributing to higher rates of saving and decreasing debt rates occurring among consumers. So while lower confidence levels may not be helping our economy grow, they are helping households rebalance out of the red and into the black.