What is the role of consumer confidence in the economy?

Consumer confidence is a measure of how optimistic consumers are about the overall state of the economy and their personal financial situation. High consumer confidence leads to increased consumer spending, as individuals feel secure in their economic prospects and are willing to make purchases or invest. This, in turn, drives economic growth and encourages businesses to expand. Low consumer confidence, on the other hand, can lead to reduced spending, as consumers become more cautious and save more. Consumer confidence is an important economic indicator, as it can signal future economic trends and impact overall demand for goods and services.