The Surveys of Consumers are conducted by the Survey Research Center at the University of Michigan. Founded in 1946 by George Katona, the surveys have long stressed the important influence of consumer spending and saving decisions in determining the course of the national economy.
The Surveys of Consumers have proven to be a key indicator of the future course of the national economy. Measures of consumer expectations produced by the Surveys of Consumers are included in the Leading Indicator Composite Index that was created by the U.S. Department of Commerce, Bureau of Economic Analysis, as well as the OECD Composite Leading Indicator for the United States. The inclusion of data from the Surveys of Consumers for these leading indicators is a significant confirmation of its capabilities for understanding and forecasting changes in the national economy. Each series included in the Leading Indicator Composite Index was selected because of its performance on six important characteristics: economic significance, statistical adequacy, consistency of timing at business cycle peaks and troughs, conformity to business expansions and contractions, smoothness, and prompt availability.
The Index of Consumer Expectations focuses on three areas: how consumers view prospects for their own financial situation, how they view prospects for the general economy over the near term, and their view of prospects for the economy over the long term. The Expectations Index represents only a small part of the entire survey data that is collected on a regular basis.
Each monthly survey contains approximately 50 core questions, each of which tracks a different aspect of consumer attitudes and expectations. The samples for the Surveys of Consumers are statistically designed to be representative of all American households, excluding those in Alaska and Hawaii. Currently, households are recruited via postal address based sampling, and about 1,000 interviews are conducted each month. Preliminary releases are published mid-month, and final releases are published at the end of the month.
The core questions cover three broad areas of consumer sentiment: personal finances, business conditions, and buying conditions. Overall assessments of past and expected changes in personal finances are supplemented by measures of the expected change in nominal family income, as well as expected real income changes. Attitudes towards business conditions in the economy as a whole over the near and the long-term horizon are measured in detail. Specific questionnaire items concerning expected changes in inflation, unemployment, and interest rates, as well as confidence in government economic policies, supplement the more general assessments. Finally, several questions probe for the respondent's appraisal of present market conditions for large household durables, vehicles, and houses.
In each area, consumers are not only asked to give their overall opinions, but are also asked to describe in their own words their reasons for holding these views. These follow-up questions reflect a growing interest in not only projecting what consumers will do, but also understanding why consumers make certain spending and saving decisions. Understanding the rationale that consumers give for their actions enables us to understand why consumers react differently to the same economic phenomena at different times.
The response of consumers to the sudden news of the plunge in stock prices in October 1987 both highlighted the importance of consumer expectations and suggested that consumer reactions would be different than many analysts expected. Following the crash, the most common assessment was that consumer confidence would play a pivotal role in determining whether a recession would develop. The surprise was that the fear and panic on Wall Street did not spread to Main Street. Consumers displayed a more measured response, assessing the direct damage to their own financial situation as limited, and the overall influence of the crash as unlikely to spread and engulf the entire economy.
Purchases of homes, vehicles, and household durables, as well as the incurrence of debt and acquisition of financial assets, are important economic decisions for individual families, but in the aggregate, the timing of these decisions influences the course of the entire economy. These large and infrequent spending and saving decisions are often associated with planning and deliberation on the part of consumers, rather than with impulse or habit. Moreover, these decisions are not based solely on consumers' current economic situation, but also depend on their expectations about household income, employment, prices, and interest rates.
Economic optimism promotes consumer confidence and a willingness to make large expenditures and debt commitments, while economic uncertainty breeds pessimism and a desire to curtail expenditures and rebuild financial reserves. When many people change from an optimistic to a pessimistic view of economic prospects at the same time, it has been repeatedly found that a widespread shift toward postponement of expenditures follows. It is in this manner that the economic optimism and confidence of individual families exert their influence on the course of the aggregate economy.
The importance of consumer optimism and confidence in shaping the course of the economy has been recognized in many countries. Other countries that now regularly monitor consumer sentiment through studies that are patterned after the Surveys of Consumers include: Austria, Australia, Belgium, Canada, Denmark, Finland, France, Germany, Great Britain, Greece, Ireland, Italy, Japan, Luxembourg, Norway, Spain, Sweden, Switzerland, and Taiwan.
Last update: August, 2025
