Overview
Palanor: Consumer Confidence is a composite read of the American consumer — not their feelings alone, but how those feelings line up against what the household balance sheet is actually doing. The reading is scaled 0 to 100, where 100 is the most confident consumer the model has seen in the 24-month baseline window, and 0 is the most anxious. We watch this number not as a forecast but as an observation: when survey sentiment and credit stress disagree, the index says so.
Why these components
Two survey-based sentiment series anchor the index: the University of Michigan Consumer Sentiment Index and the OECD's normalized Consumer Confidence Indicator. We add CNN Business's Fear & Greed reading as a faster, market-priced sentiment proxy. Against that, we set two hard-data series: the credit card delinquency rate (household stress observed, not asked about) and real retail sales (what the consumer is actually doing with the dollar). The three Google Trends terms — layoff, savings, recession — are the anxiety undercurrent. When households are calm, those searches go quiet; when households are bracing, they rise together.
Methodology
Each component is transformed into a z-score against its trailing 24-month distribution (with the exception of CNN Fear & Greed, which is already a bounded 0–100 series and is recentered around 50, and Retail Sales, which uses a 12-month percentage change because the level series is non-stationary). Components flagged as negative are sign-flipped — rising delinquency lowers the composite. The weighted sum is mapped through a logistic function into the 0–100 range. If a component is missing on a given run (Google Trends rate-limited, CNN endpoint failed), its weight is dropped and the remaining weights are renormalized to sum to 1. The components table records exactly what was used in any particular reading.
Interpretation
Readings above 65 indicate a consumer running confidently above the two-year average. Readings below 35 indicate the household is bracing. The most informative regime is divergence: surveys high, delinquency rising — confidence on paper, stress underneath. The index is built to surface that disagreement rather than mask it.