Indiantelevision.com Team

(30 May 20098 9:40 pm)

MUMBAI: Consumer spending continues to signal massive pessimism, reveals the latest CNBC-TV18 Boston Analytics Consumer Confidence Index for May.

The index for May has recorded its lowest reading at 71, registering a fall of 4.2 per cent from April's reading of 74.1.

This is the third consecutive month of decline for the consumer spending component of the index.

According to the survey, after a marginal increase in the past month, the employment component has also fallen suggesting more pessimistic views regarding unemployment, job security and ease of creating alternative means of employment. Inflation continues to remain a concern for consumers primarily due to rising food prices.

The CNBC-TV18 Boston Analytics Consumer Confidence Index consists of two sub-indices - the Current Situations Index and the Future Expectations Index.

This month the Current Situation Confidence Index registered a slight fall, while the decline in the Future Expectations Confidence Index was more pronounced.

The Current Situation Confidence Index has fallen marginally by 1.7 per cent from 71.4 in April to 70.2 in May. Meanwhile, The Future Expectations Confidence Index dropped by 6.8 per cent from 77.6 in April to 72.3 in May.

The May survey also lets slip that all components of employment confidence remained gloomy, the only ray of hope being that spending on necessities rose in May as compared to previous months.

However, spending on consumer discretionary items continued to fall. The consumer spending confidence component fell 8 per cent in May. One of the reasons for the same, the study noted, could be weak employment outlook as employment confidence component fell 5.1 per cent in May.