PMI and consumer confidence offer different views of the economy: PMI summarizes business respondents’ reports of changing activity, while consumer-confidence indexes summarize households’ assessments and expectations. This comparison uses the ISM U.S. Manufacturing PMI and distinguishes two consumer measures: The Conference Board’s Consumer Confidence Index (CCI) and the University of Michigan’s Index of Consumer Sentiment. Their headline numbers use different methods and scales, so they should not be compared as if they were interchangeable.
What PMI measures
The Institute for Supply Management (ISM) bases its U.S. Manufacturing PMI on monthly responses from purchasing and supply executives. It asks whether conditions changed from the previous month. The headline is a diffusion-index composite of five equally weighted components:
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- New orders
- Production
- Employment
- Supplier deliveries
- Inventories
For a diffusion index, ISM counts positive responses and half of unchanged responses. Supplier deliveries are treated differently: slower deliveries contribute positively to that component. ISM seasonally adjusts specified components and the headline composite. These methods are specific to the manufacturing index; ISM’s Services PMI has different components, and regional purchasing reports are not the same as the national survey. ISM’s Manufacturing PMI methodology describes the construction and interpretation.
How to read the 50-point threshold
An ISM Manufacturing PMI above 50 indicates general expansion in the manufacturing economy; below 50 indicates general decline. It is a directional measure, not a percentage: a PMI of 55 does not mean manufacturing output grew 5%. ISM says the distance from 50 indicates the extent of expansion or decline. ISM also describes 47.5, over time, as a threshold associated with overall U.S. GDP expansion or decline. That qualified historical relationship is not a guarantee, nor does it make one month’s reading a definitive signal about GDP.
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What consumer confidence measures
“Consumer confidence” is not one uniquely defined index. The Conference Board’s CCI and Michigan’s Index of Consumer Sentiment are separate measures, with their own questions, construction, and interpretation. A reported level is meaningful only when paired with its publisher, series, and release month.
The Conference Board Consumer Confidence Index
The CCI focuses on consumers’ views of current business and employment conditions, plus expectations six months ahead for business conditions, employment, and income. The Conference Board’s Consumer Confidence Survey documentation presents it as a consumer-perspective measure and among the early monthly indicator releases. Its technical note, dated February 2011, calls the CCI a barometer of the U.S. economy from the consumer’s perspective; that note is useful for describing the index’s stated purpose, not for establishing current survey-provider arrangements. The Conference Board’s technical note provides further detail.
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University of Michigan Index of Consumer Sentiment
Michigan’s Surveys of Consumers use selected questions to construct the Index of Consumer Sentiment and also report measures of current economic conditions and expectations. The national dwelling-unit sample is designed to represent U.S. adults. The survey’s wider purpose is to study how attitudes relate to financial choices such as saving, borrowing, and discretionary purchases—not simply to produce one headline number. See the University of Michigan’s Surveys of Consumers information.
How the indicators differ
| Comparison | ISM U.S. Manufacturing PMI | Consumer confidence or sentiment |
|---|---|---|
| Who responds | Purchasing and supply executives reporting on organizational conditions | Consumers or U.S. adult households |
| What is measured | Month-to-month business changes, including orders, production, employment, deliveries, and inventories | Perceptions of current conditions and expectations, including views of the economic and personal outlook |
| What the headline represents | A diffusion-index composite of five manufacturing components | A publisher-specific index built from selected consumer survey responses |
| Basic interpretation | Above 50 signals general manufacturing expansion; below 50 signals general decline | Interpret within the named series and its own reference base; the PMI threshold does not apply |
| Useful perspective | Reported near-term direction in manufacturing and its component details | Household attitudes and expectations relevant to financial and spending decisions |
Why the readings can diverge
The indicators ask different people about different things. Purchasing managers report changes in business activity; consumers report perceptions and expectations. A gap between the signals is therefore not, by itself, evidence that either survey is wrong. Nor does divergence alone show that consumer confidence caused a PMI change, or that one series predicts the other. Treat them as complementary perspectives, not competing measurements of the same variable.
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How to use the indicators together
- Name the series. Specify ISM Manufacturing PMI, The Conference Board CCI, or Michigan’s Index of Consumer Sentiment rather than using “PMI” or “consumer confidence” without qualification.
- Check what respondents were asked. PMI reports month-to-month business changes; the consumer indexes cover views and expectations. Their topics and respondent groups differ.
- Use each scale on its own terms. Apply the above-or-below-50 convention only to ISM Manufacturing PMI. Interpret consumer-index levels and changes against the relevant series’ documentation and history.
- Compare the same release period where possible. These measures are released on their own schedules, and monthly readings can change. Identify the release month and publisher when citing a value.
- Read the components and context. A PMI headline condenses five manufacturing components; consumer measures have publisher-specific questions and subindexes. The headline alone does not capture every detail.
For this evergreen comparison, no current monthly readings are included. Because releases change monthly, a current-value comparison requires checking each publisher’s exact release month and status; ISM also updates seasonal factors annually.
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