It reflects the consumers spending and saving habits. For example if the index shows that people are saving more consumer markets would decrease the overall volume of trade. If the index has results that people are saving too much, then the Fed Reserve board would lower interest rates to try to spark more loans and thus cause more spending. If the consumer index is in the opposite direction then the Fed Reserve would increase the interest rate to curb inflation and prevent the emergence of a bubble economy. To sum it up the Consumer Confidence reflects people’s attitudes of the present and it gives businesses and individuals a gage on where the overall economy is heading which could assist them in making profits. I hope this helps you understand the significance of it.

It gives an indication of their spending habits. If consumer confidence is strong, they will be more likely to purchase goods. This is very important to manufacturers and retailers.