Korea: Consumers turn pessimistic for the first time in over a year in August
The Bank of Korea’s composite consumer sentiment index fell for the third consecutive month in August to 99.2 points from 101.0 points in July, the lowest reading since March 2017. Consequently, the index now lies below the 100-point threshold that separates optimism from pessimism among Korean households.
The deterioration in August was largely driven by more pessimistic sentiment regarding current and future domestic economic conditions. Falling consumer confidence was likely underpinned by a combination of trade tensions between China and the U.S. and stagnant job growth, with the unemployment rate creeping up in July. Consumer sentiment regarding current living standards and prospective household income worsened in August, while their perspective on their future living standards was unchanged. Meanwhile, consumers’ outlook on prospective household spending improved in August.