The Consumer Confidence Index (CCI), which had been in a downtrend since July 07, perked up in November to stand at a level of 86.5, up 5.2% over the previous month. Propelling the increase in the CCI was the 9.2% jump in the level of the Present Situations Index (PSI) to 68.3 after it had slumped to a four-month low of 62.5 in October. At the same time, the Expectations Index (EI) rose 3.3% to 100.2 from 97.0 in October, giving rise to hopes of a pick-up in consumer spending.
Declines in basic foodstuff prices and upbeat assessments on the overall state of the economy have helped to quell consumer concerns over the prospects for the economy in the months ahead. At the same time, consumers should spend more – especially on traveling – during the holidays at the end of the year. This should give a timely boost to the economy.
Consumer spending plans recovered in November and are now actually at their highest levels in the history of the survey. The proportion of consumers who plan to buy durable goods climbed from 25.4% to 30.1%, with consumers probably more hopeful that loan rates would be cut further. In particular, buying plans for motorcycles and audio-visual equipment rose sharply. Consumers also expressed a greater desire to purchase homes and land, as well as to undertake home renovation.
In line with the stronger buying intentions, the Consumer Confidence toward the Government Index (CCGI) also gained ground in November. This index rose 4.8% to stand at a level of 102.0, or its highest level since December 2006. In particular, consumers are more confident now in the government’s ability to spur economic growth but less sanguine in regard to the government’s ability to provide public infrastructure. Consumer Confidence Report December 2007