Financial Planning Jargon

Consumer confidence index

So, you’ve heard the murmurs about Consumer Confidence Indexes, but do not have any idea what it means?

The Consumer Confidence Index (CCI) is an indicator designed to measure consumer confidence, which is defined as the degree of optimism on the state of the economy that consumers are expressing through their activities of savings and spending. (Wikipedia)

Currently, the CCI is measured at -9 (lowest -33, highest 23). Basically, this means consumers are spending less money.

On a positive note, the result of this will probably be a slower rise in food prices, and there is a high possibility that the Reserve Bank will lower interest rates (as we are technically in a recession).

The negative side of this coin sees a stagnant unemployment rate due to government trying to lower their wage bill, and nobody spending the money to pay new salaries. Loan applications of all kinds will be managed with an iron fist, and will in all likely hood be very hard to come by.

All in all, you will be left spending ONLY the money you earn, and not borrowed money, as there won’t be much of that going around…

(Originally published on 12 July 2017)

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