The Relationship Between Consumer Confidence Index and Gdp

It is accepted that expectations is affacted from economic agents’ consumption, saving and investment decisions. It is important to trust on economy that expectations’ way. The knowledge of expectations’ way is a crucial role on measurment of consumer’s confidence. The consumer confidence index measures the consumer today and future expectations’ via surveys. This result affects consumers’ consumption decisions via consumption expenditures changing GDP. Economic indicators includes information about economys’ today and future situation. As economy policy is applicated using leading indicators that shows economy’s future situation. Leading indicators that provides information about the future state of the economy are frequently used in economic policy applications. One of these variables is the consumer confidence index, as it shows the direction of the consumers’ expectations. Consumer confidence index can inform about not only future values of consumption but also future values of GDP. In the study, it was investigated whether the consumer confidence index has a leading indicator in terms of GDP. For this purpose, long and short term relationships between GDP and consumer confidence index between 2004:1 and 2019:3 for three months datas are examined. The results showed that there is a long-term relationship between the consumer confidence index and GDP, and there is a one-way causal relationship from the consumer confidence index to GDP in the short term. The results also say that consumer confidence index is used as a leading indicator for GDP’s future values determination.