The Rasmussen Index
The Rasmussen Consumer Index and Rasmussen Investor Index were established in October 2001. The Indices measure America’s economic confidence on a daily basis and serve as leading indicators of economic and stock market performance. Updates are released to the public every morning.
Both the Rasmussen Consumer Index and the Rasmussen Investor Index are based upon a series of identical questions asked every night during a national telephone survey of 500 adults. Fifteen thousand (15,000) interviews are collected each month. All respondents are asked to rate the economy and their personal finances, whether the economy is getting better or worse, whether their personal finances are getting better or worse, and whether the country is in a recession, heading into a recession or coming out of a recession.
In addition to general measures of economic confidence and expectations, respondents are asked about employment issues, asset allocation preferences among investors, shifting perceptions of interest rates, risk preferences of investors, purchase expectations and more. Also, we ask daily current events about topics of interest to the business community.
Survey Methodology
All survey data is collected using an automated survey technique to insure the reliability of tracking data. Every single respondent hears exactly the same question, from the exact same voice, asked with the exact same inflection every single time. A person taking our survey tonight will hear the exact same thing that another respondent heard when we began this project in October 2001.
Upon completion of the survey, a weighting process is applied to insure that the sample accurately reflects that nation’s population in terms of geography, age, race, gender, political affiliation, and other factors.
The weighted data is then processed through a proprietary formula to quantify the economic confidence of American Consumers. A baseline of 100.0 for the Index was established in October 2001. When the Rasmussen Consumer Index is higher than 100.0, overall levels of confidence are higher than they were in the baseline month.
National results are reported based upon a three day rolling average including 1,500 interviews. A three-day sample is reported to minimize statistical noise and to maintain an adequate sample for analysis.
Data collection ends at midnight Eastern Time (9:00 p.m. in the Pacific Time Zone) and results are available by 8:00 a.m. Eastern the next morning. In the future, we will accelerate the process to have the raw data available by 1:00 a.m. Eastern.
Our nightly data collection and rapid turnaround enables the Rasmussen Consumer Index to report trends in consumer confidence two to six weeks ahead of other services. An article by economist and fund manager Dr. John Rutledge in Real Money.com said that the reports issued by the traditional services are “a good read—if you like reading history.”
When data is released on the Conference Board’s Consumer Confidence Index, the University of Michigan Consumer Sentiment Index, and the ABC/Money Magazine Consumer Comfort Index data, it routinely confirms what the Rasmussen Consumer Index showed several weeks earlier.
The Rasmussen Consumer Index is able to beat the competition because our competitors all have time lags built into their methodologies. For example, the Conference Board uses a mail in survey that must be completed in the first half of the month to be included in the month-end report. All of our competitors’ confidence indicators include data that is up to four weeks old when reported. When the Rasmussen Index is reported, all data has been collected in the previous 8 to 63 hours.
The three-day sample upon which we report includes approximately 725 investors (defined as those who own more than $5,000 worth of stocks, bonds, and mutual funds). Responses from these investors are processed using the same formula to quantify the Consumer Index. In October, 2001, Investor Confidence was first measured at 106.5.
Our existing database can also be used to calculate the economic confidence of Business Executives, Entrepreneurs, Government Employees, and other subsets of the population. From a target market perspective, we can measure the economic attitudes and trends of parents, retirees, high-income Americans and others.
Data can also be reported on a regional, state, or metro-market basis. For example, from our existing data base, we can regularly report on the economic confidence of New England, California, or the New York metro-market.