World News – USA – November Surprise

Consumer sentiment showed a clear and somewhat surprising upturn in November, which could indicate stronger prospects for the Christmas spending.

The latest Irish consumer sentiment index from KBC Bank rose to 65. 5 in November from 52. 6 in October and brings the index back to its strongest level since March.

However, the November value is still well below the value of 85 at the beginning of 2020. 5, or the 25-year survey average of 87.

KBC Bank Ireland said the November recovery may have been due to a flood of strong economic publications and several new job postings during the survey period.

It was also suggested that consumers could potentially focus on the prospect of Christmas lights at the end of a pandemic tunnel.

However, the bank also highlighted the « choppiness » of polls over the past few months as consumers in Ireland and elsewhere seek to understand an unprecedented and very uncertain environment.

« It should also be emphasized that the level of November sentiment measurement still points to a cautious and likely confused Irish consumer, » said Austin Hughes, chief economist at KBC Bank Ireland.

KBC found that all five main elements of the consumer sentiment index showed significant improvements between October and November, but that the increases were greatest relative to the macro components of the survey.

The pandemic had given Ireland and other countries a serious macro shock, but the intensity of the effects on age groups, regions, employment categories and income distribution varied widely.

As a result, the « personal » elements of the survey have seen a smaller, if still significant, weakening, the bank added.

« While countering threats to the immediate outlook and supporting sentiment and spending throughout the year is critical, an economy isn’t just for Christmas, » said Austin Hughes.

« The main task must be to ensure that the policy framework evolves to limit longer-term threats to jobs and income and health outcomes, » he added.

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Consumers, Consumer Confidence Index, KBC Bank Ireland