Consumer confidence remains depressed
Consumer Confidence Index for November 2006 fell by five points to 78 points. The main reason for the drop was consumers? assessment of their current economic circumstances, with poorer assessments about the future as a contributing factor.
Compiled by Globes Research, the Consumer Confidence Index has been volatile in recent months, underscoring the publics difficulty in assessing the countrys economic performance and its effect on them. However, trend figures show slow but steady erosion in confidence over the past six months since the Knesset elections.
Whereas it seemed in October that the public was beginning to get over the effects of the second Lebanon war, pessimism again prevailed in November.
The most prominent negative trend related to the publics jobs expectations. The expanded Consumer Confidence Index, which also weights assessments about the labor market, fell by six points in November, even though the latest data indicates that unemployment is falling. It appears that the publics assessments about jobs are more influenced by expectations about general economic circumstances than by current labor market data.
An analysis by Globes Research and Kesselman and Kesselman Pricewaterhouse Cooper Israel indicates a sharp downward trend in the public?s plans to purchase durable goods. This decline reflects the indexs pessimistic results about the likelihood of a slowdown in the growth in private consumption in early 2007. On the other hand, the publics plans for purchases of new cars and homes have been slowly rising for several months.
The survey for the Consumer Confidence Index, conducted by the Smith Institute, indicates uniformity in pessimistic assessments among different population segments concerning the current economic circumstances and the future of the labor market. Women and people with higher education were somewhat more optimistic about their personal economic futures.
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