Consumer Confidence

The University of Michigan’s Consumer Sentiment Index (CSI) is one of the longest-running, most closely watched gauges of how American households feel about the economy. It blends today’s lived experience with expectations about the next few years, producing a single composite reading on the national mood. Because consumer spending accounts for roughly two-thirds of U.S. GDP, shifts in sentiment can offer early clues about economic turning points.

The current Consumer Sentiment Index score of 53.60 is 2.5 standard deviations below its historical average, suggesting that the market sentiment is Very Pessimistic.

Note: We consider sentiment to be a contrarian indicator of market value. As Warren Buffett said: "be fearful when others are greedy ... and greedy only when others are fearful". In that sense we very loosely view signs of market optimism as an indicator that things may be a little frothy, and signs of market pessimism as potential buying opportunities for long term investors. That said, these models in particular need to be understood in a larger context, as they may be leading indicators of better/worse times ahead.

Survey Methodology

The Consumer Sentiment Index is derived from the University of Michigan’s long-running Surveys of Consumers, a nationally representative survey that has been conducted since the late 1940s. Each month, researchers contact a fresh cross-section of U.S. households and ask a consistent set of questions about personal finances, buying conditions, and expectations for the broader economy. While the wording of the questions has remained nearly unchanged for decades, the survey’s sampling and weighting methods have been updated over time to preserve national representativeness.

The survey consists of five core questions. Two focus on current conditions—how households perceive their present financial situation and whether they view now as a good time to purchase durable goods. Three questions look forward—assessing expectations for personal finances over the next year, business conditions over the next year, and longer-term business conditions over the next five years. Responses are categorized as “good,” “bad,” or “unchanged,” and then converted into relative score components using a standardized formula that compares positive to negative responses.

Each question’s score is scaled and normalized to a 1966=100 index base. The two current-conditions questions are combined to form the Current Economic Conditions (CEC) sub-index, while the three expectations questions form the Consumer Expectations (CEI) sub-index. The headline Consumer Sentiment Index (CSI) is then computed as a weighted blend of these two components. This consistent structure is what makes the CSI such a powerful historical gauge: its meaning today is directly comparable to its meaning in the 1970s, 1980s, and every cycle since.

Because the survey taps directly into household attitudes—and because attitudes can shift quickly in response to inflation, employment, and political uncertainty—the CSI often moves ahead of hard economic indicators. For analysts, the stable methodology and long data history make it a uniquely valuable lens into how American consumers interpret both their immediate environment and the broader economic landscape.

How the CSI Is Constructed

The headline Consumer Sentiment Index is a weighted blend of the two sub-indices:

• Current Economic Conditions (CEC): Scores reflecting the present conditions for the survey respondent.
• Consumer Expectations (CEI): Scores reflecting the respondent's expectations of economic conditions in the future.

The CEI tends to carry slightly more weight because future expectations guide future spending behavior. When the overall CSI moves, it’s usually because one component is shifting faster than the other. For example:

• If consumers feel squeezed today but expect improvement, the CEC may fall while the CEI holds steady.
• If current conditions look fine but households fear trouble ahead, the CEI may fall sharply, dragging the overall sentiment index (CSI) with it.
• During broad economic turning points, both components often move in the same direction, creating clear trend signals.

Understanding which sub-index is responsible for changes in the CSI helps clarify whether rising optimism is driven by real improvements or simply hope for better days ahead.

Timing & Revisions

The University of Michigan publishes consumer sentiment data twice each month. A preliminary estimate is released in the middle of the month based on the majority of completed survey responses. A final reading follows at month-end once the full sample is collected. After this final release, the data is not revised, giving the series unusual stability compared with most economic indicators.

All data is cited below.

Current Economic Conditions (CEC)

The CEC captures how consumers feel right now. It distills responses to questions about personal financial conditions and whether it’s a good time to purchase big-ticket items like cars and appliances. This sub-index is extremely sensitive to real-world pressures: wages, prices, interest rates, and job security.

When the CEC rises, households feel financially stable and believe current buying conditions are reasonable. When it falls, consumers are telling you—in real time—that their budgets feel tight. Historically, sharp drops in the CEC have coincided with spikes in inflation or deteriorating purchasing power.

The CEC is currently 58.60, and you can see historical values in the chart further below.

Consumer Expectations (CEI)

The CEI reflects how consumers expect their finances and the broader economy to evolve over the next 1–5 years. It includes questions about future personal financial health, short-term business conditions, and long-run economic prospects. This forward-looking lens allows the CEI to deteriorate before recessions, even when current conditions still look acceptable.

Economists pay particular attention to the CEI because it is one of the components of the Conference Board’s Leading Economic Index. A sustained decline in expectations often signals that households are preparing to pull back—reducing discretionary spending, delaying durable-goods purchases, and generally becoming more cautious.

The CEI is currently 50.30, and you can see historical values in the chart below.

Because sentiment data is inherently psychological, it tends to oscillate more than fundamental economic indicators. Yet the historical record is consistent: when consumers feel confident about their finances and the economic outlook, spending rises. When confidence cracks, consumption weakens—sometimes abruptly.

The CSI, CEC, and CEI together provide a structured view of how American households are navigating both the present environment and the road ahead. For market participants, these shifts in consumer psychology can act as an early signal of turning points in growth, earnings, and risk appetite.

Below again is the combined Consumer Sentiment Index model, showing historical values as well as the historic average and standard deviation lines, clearly illustrating that the September 30, 2025 value of 50.10 compared to historical norms. (See our ratings disclaimer for info on standard deviation bands).

The below table cites all data and sources used in constructing the charts, or otherwise referred to, on this page.

Item	Source
Consumer Sentiment	University of Michigan Consumer sentiment survey data collected and published by the University of Michigan.
Recessions	National Bureau of Economic Research (NBER), retrieved from FRED, Federal Reserve Bank of St. Louis; Used for all historical recession bar data.