cmie: January consumer sentiment index reflects lesser improvement in expectations, CMIE data shows


The index of consumer sentiments grew by 4% in January 2022 driven by an improvement in households’ perception regarding their current incomes and their propensity to spend on non-essentials, the Centre for Monitoring Indian Economy said.

According to CMIE, the index of consumer sentiments in January 2022 closed at 59.93. This was 0.58% lower than its recent peak level of 60.28 in November 2021. The index in January 2022 is, however, still 43.8% lower than the January 2020 index when it stood at 106.56.

“The improvement in consumer sentiments seen in January was not only inadequate to cover the ground lost in December but it also reflects lesser improvement in households’ expectations from the future,” CMIE said in its weekly labour market analysis.

In January 2022, 11.4% of the households said that their household incomes were higher than they were a year ago. This is not a large proportion but it is the best in a long time.

Since April 2020, the proportion of households stating that their incomes were higher than they were a year ago had never crossed double-digits. The proportion of such households has grown impressively since August 2021 when it was just 4.6%, it said.

Similarly, the proportions of households that stated that their incomes had fallen compared to a year ago fell to its lowest level of 38.1% since April 2020.

As per CMIE, before the pandemic, about one-third of the households stated that their incomes were higher than a year ago and only about 10% said that their incomes were lower than a year ago.

“Nevertheless, the improvement in perceptions regarding household incomes was the biggest reason for the recovery of sentiments in January 2022,” it added.

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