Discussion: Consumer Confidence

In this module, we focus on growing interest rate “spreads” as portending possible recession. As with interest rate spreads, consumer confidence is thought to be correlated with risk of recession.

In preparation for this discussion, research the issue of consumer confidence. Document one or more methodsused to characterize and measure consumer confidence. Compare and contrast how confidence might be related to financial markets’ expectations of risk of a recession, similarly to interest rate spreads.

• Do you find consumer confidence to be a useful measure? Explain why or why not.