Consumer Confidence Index (2012-2023)
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 had been rising nearly every year over the past decade until the COVID-19 pandemic hit.
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 to positive ones. The higher the index is, the better the economic situation and outlook.
In 2012, the US consumer confidence index was measured at 76.6. Up until 2019, aside from slight dips in 2016 and 2019, the US consumer index had been increasing steadily year after year.
Following the outbreak of COVID-19 in 2020, the US consumer sentiment fell to 81.6, a 14.4-point fall from 2019. This fell further to 77.6 in 2021. In 2022, consumer sentiment plummeted by 18.6 points to 59—the lowest in nearly half a century.
Here’s a closer look at how US consumer confidence has evolved recently.
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US consumer confidence index from Q1 2022 to Q3 2023
Breaking this down to a quarterly level, we see that US consumer confidence remains much lower than pre-pandemic levels. However, sentiment has been generally increasing in recent quarters.
2022 opened with consumer confidence registering at 63.1 in the first quarter. Two successive quarters of decline followed, as the index fell to 57.8 and 56.1 in the second and third quarters, respectively. These were the index’s lowest points since 2008, which experts attributed to inflation and rising prices brought on by Russia’s invasion of Ukraine in February 2022.
Since then, US consumer confidence has started to rise. The year closed at 58.8, and a 5.8-point increase brought the index to 64.6 in the first quarter of 2023—the highest in more than a year—before dipping slightly to 62.3 in Q2 2023 and bouncing back up to 69.5 in Q3 2023. However, this still remains some 30 points lower than pre-pandemic numbers.