Sat, Mar 28, 2009 - Page 11 News List

Index up, but consumers remain very pessimistic

EMPLOYMENT WORRIES The job outlook index shed another 1.3 points this month as the jobless rate hit 5.75 percent, a trend unfavorable to more consumption

By Crystal Hsu  /  STAFF REPORTER

The nation’s consumers have been gripped by pessimism this month despite the consumer confidence index posting a modest gain for the first time in 10 months — but it still stands at a low level, a survey said yesterday.

The poll, conducted by the Center for Taiwan Economic Development at National Central University each month, said the consumer confidence gauge increased 0.69 points to 49.1 from 48.42 last month.

A reading between zero and 100 indicates pessimism, and figures between 100 and 200 signify upbeat sentiment.

Of the six components, the stock investment gauge rose 6 points to 52.2 from 46.2 last month, while the job outlook reading shed another 1.3 points to 35.53 from 36.65, the survey said.

Shia Ben-chang (謝邦昌), professor of statistics and information science at Fu Jen Catholic University, said some respondents obviously regained confidence in the local bourse following an 18 percent jump in the benchmark TAIEX this year.

However, Shia voiced concern about the job index continuing to fall, which indicated that the public was worried about job security — a trend unfavorable to consumption.

“Unemployment will pose the biggest challenge to economic growth in light of the finding,” Shia said by telephone.

The nation’s jobless rate rose to a record 5.75 percent last month, with 624,000 people out of work, the Directorate-General of Budget, Accounting and Statistics said on Monday.

The research center’s measures on household income prospects and the domestic economic climate rose 0.35 and 0.3 points to 45.25 and 42.3 points respectively, the survey said.

The figures stood at 44.9 and 42 points last month. The improvement was too small to be significant, Shia said.

Meanwhile, the indicator on purchases of durable goods dipped 0.75 points to 79.65, meaning that consumers would likely postpone spending even though the government has lowered sales tax for buying cars.

The finding is consistent with a continuing drop in the inflation index, which slipped 0.45 points to 39.9 from 40.35 last month.

“As long as people expect prices to fall, they will delay consumption,” Shia said. “That would raise the risk of deflation.”

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