Consumer sentiment and confidence: how the surveys work

Consumer sentiment and consumer confidence surveys ask ordinary households how they feel about their finances, jobs and the economy, and turn the answers into a single monthly index. The two best known in the US are the University of Michigan's Index of Consumer Sentiment and The Conference Board's Consumer Confidence Index.

They matter because they arrive early, often before the month they describe is over, and because they capture something no sales figure can: expectations. When households grow worried about jobs or prices, that worry can show up in surveys before it shows up in spending. But surveys are "soft" data. People's answers swing with gas prices, news and politics, and gloomy readings have often coexisted with steady spending for long stretches.

This guide explains how each survey is built, works through the Michigan index arithmetic, compares soft and hard data, and covers the pitfalls of reading surveys as forecasts. Both indexes are proprietary products. This page describes their published methods and quotes only figures from the publishers' own public releases.

What the surveys measure

Both surveys ask about two things: the present (how are you doing now, compared with a year ago or as things stand) and the future (how do you expect business conditions, jobs and your own income to change). Both then split their headline into a current and an expectations component, because the two often move differently: people can feel fine about their own jobs while expecting the economy to get worse.

The University of Michigan Surveys of Consumers

The Michigan surveys were founded in 1946 by the economist George Katona at the university's Survey Research Center. According to the survey's own description:

• About 1,000 interviews are conducted each month, with about 50 core questions.
• The sample is designed to represent all American households, excluding Alaska and Hawaii, and households are recruited through postal address-based sampling. The survey publishes both web and phone questionnaires.
• Preliminary results are published mid-month and final results at the end of the month.

The Index of Consumer Sentiment (ICS) comes from five questions. In paraphrase, they ask whether the household is:

1. better or worse off financially than a year ago;
2. expecting to be better or worse off a year from now;
3. expecting good or bad times for business in the country over the next 12 months;
4. expecting continuous good times, or periods of widespread unemployment or depression, over the next five years or so;
5. seeing now as a good or bad time to buy major household items such as furniture or appliances.

The survey also publishes an Index of Current Economic Conditions, from the questions about the present (the first and fifth), and an Index of Consumer Expectations, from the three forward-looking ones. Beyond the index, it asks households what inflation they expect, answers that economists and the Federal Reserve watch as a gauge of inflation expectations; see Inflation: what it is, how it’s measured and what it does to money.

How the Michigan index is calculated

The 6.7558 is the total of the five relative scores in the 1966 base period divided by 100, so the index equals 100 when households are exactly as upbeat as they were then. The 2.0 is a constant the survey adds to correct for sample design changes made in the 1950s. Each relative score is rounded to a whole number before summing.

Two features follow from the formula. A relative score of 100 means as many favorable as unfavorable answers; "same" or "don't know" answers count for neither side. And the index measures the balance of opinion, not its intensity: a household that is slightly worse off and one that is ruined count the same.

The Conference Board Consumer Confidence Index

The Conference Board, a business research organization, runs its monthly Consumer Confidence Survey through an online sample drawn from a panel run by Toluna, a consumer research company. Its published method:

• The headline index is scaled to 1985 = 100.
• The Present Situation Index is based on consumers' assessment of current business and labor market conditions: whether business conditions are good or bad and jobs plentiful or hard to get.
• The Expectations Index is based on their short-term outlook, six months ahead, for income, business conditions and the labor market.
• Results are released at 10 a.m. Eastern on the last Tuesday of every month, based on responses collected through a cutoff earlier in the month (October 1 to 21 for the October 2026 preliminary reading).
• The survey also asks about recession odds and inflation expectations, which are not part of the index.

The gap between the two components is the kind of split these surveys exist to show: respondents rated present conditions far better than the outlook.

Why the two surveys differ

The Michigan survey leans toward household finances and prices: three of its five questions are about the respondent's own finances or buying conditions. The Conference Board survey leans toward the labor market: its questions about jobs being plentiful or hard to find carry a lot of weight. So the Michigan index tends to react more to inflation and gasoline prices, and the Conference Board index more to the job market. They use different samples, base years and timing, and their levels can't be compared directly. A hypothetical reading of 75 on one and 95 on the other would say nothing about which households are gloomier.

Soft data versus hard data

Economists call survey measures soft data and measured activity, such as sales, spending, production and employment, hard data. Soft data have real advantages: they arrive weeks earlier, are rarely revised much, and capture expectations, which can turn before activity does. Hard data are anchored in transactions but arrive later and get revised.

The two often disagree. Over the summer of 2026, for example, hard spending data kept growing: real personal consumption expenditures rose at a 3.8% annual rate in Q3 2026, and retail sales in September 2026 were up 6.3% on a year earlier in dollars, about 2.5% after inflation. In October the Conference Board's Expectations Index stood at 72.6, far below its Present Situation reading. A survey can describe how people feel about the economy without predicting what they will spend; plenty of households report gloom and keep shopping as long as they have jobs and income.

That is why most analysts treat sentiment as a supporting indicator. A slide in confidence is more meaningful when it coincides with weaker hard data, such as rising Jobless claims: reading the weekly unemployment insurance report, slowing payrolls or falling real retail sales. The roles of leading and coincident indicators are explained in Leading, lagging and coincident indicators: what turns first.

What moves sentiment

Survey answers respond to what households see every day:

• Prices, especially gasoline and food, which are bought often and noticed quickly.
• Jobs: layoffs among friends and family, how easy it is to find work.
• Interest rates, through mortgage and car-loan payments and the "good time to buy" questions.
• Stock prices, for the households that own shares directly or through retirement accounts.
• News and politics. Answers can shift with headlines and elections, and researchers have documented partisan swings in how people rate the same economy.

Because several of these move with no change in spending power, survey indexes can be volatile from month to month.

How markets react

Sentiment releases usually move markets less than payrolls, CPI or retail sales, because they don't measure activity directly. They matter most when they surprise strongly against forecasts, or when a component that investors care about moves: the Michigan survey's inflation expectations can move Treasury yields, since rising expected inflation can keep the Fed cautious. The general framework for reading a release against consensus is in How markets react to economic data: surprises, regimes, revisions.

The stock market has its own sentiment measures, such as the options-based VIX and the put-call ratio. Those describe investor positioning, not household mood, and the two need not agree.

Pitfalls and limitations

• Feelings aren't spending. Long periods of weak sentiment with steady consumption are common. Don't forecast spending from a survey alone.
• Monthly noise. Moves of a few points can come from sampling and headline-driven swings. Look at three-month averages and at both components.
• Preliminary versus final. Michigan's mid-month reading is revised at month-end; Conference Board's reading uses a cutoff that excludes the last days of the month.
• Method changes. How a survey recruits and interviews people (phone, web, panel) affects the answers, so levels from different eras or methods may not be comparable.
• Base years differ. The two indexes' levels aren't comparable; each is relative to its own base period (1966 and 1985).
• Partisanship and news. Answers can reflect views of politics or of the news rather than personal circumstances.
• Proprietary data. Both series belong to their publishers and come with licensing terms. Figures should be quoted from their official releases.

Sentiment surveys compared with other consumer data

The hard-data counterparts are covered in Retail sales report: what it measures and how to read it, The jobs report: how to read nonfarm payrolls and the two surveys and GDP explained: how gross domestic product is measured and read.

How Finabase does it

Finabase does not carry the Michigan or Conference Board indexes, or any other survey data, and has no economic calendar. The comparison figure on this page is ours, and the survey figures are quoted from the publishers' public releases.

What the app shows is how markets respond. The Consumer discretionary sector page lists the S&P 500's retailers, automakers, restaurant and travel companies, which are often the stocks that move most on consumer news, and the Sector page compares all 11 sectors. The VIX page shows the market's options-based volatility index, a measure of investor rather than household sentiment. The Discover page's Economy topic gathers web articles about the economy, including sentiment releases.

Frequently asked questions

What is the difference between consumer sentiment and consumer confidence?

They are two different surveys. "Consumer sentiment" usually means the University of Michigan's index, which focuses on household finances and buying conditions and is scaled to 1966. "Consumer confidence" usually means The Conference Board's index, which weighs business and job conditions and is scaled to 1985 = 100.

When are the surveys released?

The Michigan survey publishes a preliminary reading mid-month and a final reading at the end of the month. The Conference Board releases its index at 10 a.m. Eastern on the last Tuesday of each month.

Does low consumer confidence mean a recession is coming?

Not on its own. Sentiment can stay low for long periods while households keep spending. A fall in confidence matters more when hard data, such as jobs, claims and real spending, start to weaken too.

How is the Michigan sentiment index calculated?

For each of five questions, the survey takes the percentage of favorable answers minus unfavorable answers, plus 100. It sums the five scores, divides by the 1966 base-period total of 6.7558 and adds a constant of 2.0.

Why do economists call surveys soft data?

Because they measure opinions and expectations rather than transactions. Hard data, such as retail sales or payrolls, count what people and firms actually did.

Summary

Consumer sentiment and confidence surveys turn households' answers about their finances, jobs and the economy into monthly indexes. The University of Michigan's index uses five questions, about 1,000 interviews a month and a 1966 base; The Conference Board's uses an online panel, five questions weighted toward jobs and a 1985 = 100 scale, and stood at 91.7 in October 2026. Both arrive early and capture expectations, which makes them useful for spotting turning points. But they measure feelings, not spending, and can diverge from hard data for months, so they work best read alongside retail sales, real consumption and the labor market.