Peru: Consumer confidence retreats in May as employment prospects stutter
May 30, 2014
In May, the consumer confidence indicator published by APOYO Consultoria decreased from April’s 54 points to 51 points. May’s fall offset the gains that were recorded in April, although the index held just above the 50-point threshold that separates optimistic from pessimistic territory. The reading shows that April’s strong result was not the beginning of an upward trend afterall and suggests that recovery in the labor market will have to be more consistent to drive confidence and consumption up.
Almost all of the sub-components that compose the indicator fell in May, except for expectations regarding the evolution of inflation, which were stable. The greatest drop was registered in households’ perceptions regarding employment prospects. According to APOYO, this suggests that the modest increase in employment in recent months has not been great enough to improve household perceptions.
Optimism regarding the overall economy moderated across all socioeconomic levels. Individuals in the low-income bracket were less optimistic, particularly in terms of the labor market, with confidence dropping to the lowest point in three years. APOYO explained that this coincides with falling small business employment.
Author: Carl Kelly, Economist