Consumer sentiment likely to witness fall in December: CMIE

 Data from CMIE shows that the proportion of households where more than one person is employed has fallen from 34.7% in 2016 to 32.3% in 2017 to 30.1% in 2018 and to 28.4% In 2019.
Data from CMIE shows that the proportion of households where more than one person is employed has fallen from 34.7% in 2016 to 32.3% in 2017 to 30.1% in 2018 and to 28.4% In 2019.

The weakening consumer sentiment in December could end up in a dip in consumer sentiments this month compared to a small growth in November and may pose a challenge to India’s economic recovery though its impact on the third quarter will be mild, the Centre for Monitoring Indian Economy said.

“December is not looking good on consumer sentiments. We can see this in the weekly data and we can see this in the 30-day moving average data as well,” CMIE said in its weekly labour market analysis.

“Trends suggest that the month is likely to register a fall in consumer sentiments compared to November. This would be the first month to record a fall in consumer sentiments since June 2021,” it said.

As per the CMIE data, the weekly index of consumer sentiments for the week ended December 26 stood at 55.1 while the 30-day moving average of the index of consumer sentiments on December 25, 2021 was at 57.1.

“This was 4.7% lower than it was at the end of November 2021. It seems unlikely that this fall will be recovered in the last six days of the month,” CMIE added.

CMIE is apprehensive that the fall in consumer sentiments in December, after five months of an impressive rise following the second wave, could significantly stall the economic recovery in India.

The index of consumer sentiments was at 56.6 in March 2021 but fell to 47.7 by June 2021 following the second wave of Covid-related restrictions. The recovery, however, was quick as the index had touched 58.2 by September 2021.

However, the growth has slowed down since then. The index rose by 2.1% in October and then by 1.2% in November 2021 to touch 60.1 last month.

“In December, the index is seen losing ground. It is sliding back,” CMIE added.

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