As the pulse of the U.S. economy, the Consumer Confidence Index (CCI) offers a window into how households feel about their finances and the broader economic outlook. In June 2025, the CCI dipped to 93.0, raising questions about what drives consumer sentiment and why it matters so deeply to everyone from policymakers to businesses and investors.

What Is the Consumer Confidence Index?

The Consumer Confidence Index is a gauge of household optimism or pessimism regarding economic conditions. Compiled and published monthly by The Conference Board since 1967, this measure relies on a monthly survey of 5,000 U.S. households to capture perceptions of both present circumstances and future prospects.

Hitting above 100 means consumers are more upbeat than they were in the benchmark year of 1985; figures below 100 reveal subdued confidence. Over decades, the CCI has earned its place as a trusted barometer of economic health.

How Is the CCI Calculated?

The index springs from five fundamental questions asked each month. Two focus on how consumers rate current business and employment situations, while three probe expectations for business conditions, employment, and family income six months ahead.

Weighting plays a key role: present conditions account for 40% of the final figure, while future expectations contribute 60%. The formula is straightforward:

CCI = [Present Situation Value + Expected Situation Value] / 2

Values derive from the percentage of positive responses minus negative responses for each question. Setting 1985 as the baseline (CCI=100) permits comparison over time.

Recent Trends and Numbers

June 2025’s reading of 93.0 marked a 5.4-point decline from May’s 98.4, reflecting a softening mood among U.S. households. Several nuances underpin this dip:

• Only 16.3% of consumers expect their incomes to rise, down from 18.6% in May.
• Despite the overall slip, plans to purchase homes, cars, vacations, and electronics ticked up in June compared to earlier months.
• Inflation expectations eased to 6.5% for the next year, down from a peak of 7% in April.

Interestingly, fewer households foresee a recession in the next 12 months, though this perception isn’t woven into the official CCI calculation.

The Five Components of Consumer Confidence

To understand the index’s anatomy, examine the April 2025 breakdown, which highlights the balance of optimism and pessimism among respondents.

This granular view clarifies why the overall CCI may diverge from specific purchase intentions or saving behaviors.

Behavioral Shifts and Spending Trends

Beyond raw sentiment, the CCI survey illuminates how consumers plan to act:

• 36.7% of households saved for future spending, signaling caution amid uncertainty.
• 26.6% dipped into savings to cover expenses, a worrying sign for long-term financial resilience.
• 26% postponed major purchases like big appliances or vehicles.

Yet, dining out and streaming services remain consumer favorites, with entertainment spending surging month over month.

Demographic Variations

Not all households feel the same. Income levels shape both sentiment and behavior:

Higher-income families—earning over $125,000 annually—tend to save more and accelerate big-ticket purchases ahead of tariff changes. Lower-income households are more likely to delay purchases and rely on savings, highlighting income inequality’s role in economic resilience.

Consumer Sentiment on Housing and Major Purchases

Housing sentiment, captured by the Fannie Mae Home Purchase Sentiment Index (HPSI), offers another lens. In October 2024, the HPSI climbed to 74.6—the highest since early 2022. Key takeaways:

• 20% of consumers said it was a good time to buy a home.
• More respondents expected home prices to rise and mortgage rates to fall.
• Job loss fears receded, even as some reported lower household incomes.

The divergence between housing and broader consumer confidence underscores that sector-specific dynamics can differ sharply from general economic sentiment.

What Drives Consumer Confidence?

Both short-term events and long-term trends shape household optimism. Short-term factors include business cycles, recent economic news, inflation shifts, and wage developments. These are often driven by headlines and personal experiences.

Meanwhile, structural elements—income distribution, labor force participation, and demographic shifts—evolve slowly but set the baseline mood over decades. Research consistently shows that households extrapolate from recent experiences, amplifying immediate concerns or pleasures in their survey responses.

Why Policymakers and Businesses Watch CCI Closely

Consumer spending fuels roughly two-thirds of U.S. GDP. A rising CCI typically foreshadows increased spending, prompting businesses to ramp up production and hiring.

Conversely, a falling CCI can signal belt-tightening—higher savings rates, deferred purchases, and potential economic slowdowns. Policymakers monitor these signals to adjust monetary policy, and investors incorporate them into market forecasts.

How Today’s CCI Compares to Historical Figures

Values above 100 signal more robust optimism than the baseline year of 1985, while figures under 100 denote reduced confidence. Over the past decade, the index has fluctuated between periods of crisis-induced lows and post-recession highs above 120.

June’s 93.0 places current sentiment at a cautious level reminiscent of past slowdowns, yet underlying behavioral data—like steady purchase intentions for certain goods—suggests resilience amid uncertainty.

Understanding the Consumer Confidence Index equips households, businesses, and governments with a vital tool. By grasping what drives sentiment, stakeholders can make informed decisions—whether it’s timing a purchase, planning a budget, or setting policy—to navigate economic ebbs and flows with confidence.