Consumer confidence dropped slightly this month, weakening for the fifth straight month, as people feel less optimistic about the job market’s prospects amid an economic slowdown, a monthly survey by National Central University showed yesterday.
The consumer confidence index dropped to 85.32, down 0.83 points from last month’s 86.15, as all component indicators softened with the exception of the inflationary gauge, the survey showed.
“The results indicate a mild, but prevalent pessimistic sentiment that could dampen private consumption if major economic barometers fail to stabilize,” said Dachrahn Wu (吳大任), a professor of economics and director of the university’s Research Center for Taiwan Economic Development, which helped conduct the survey.
Index scores above the 100-point mark indicate optimism, while values below that threshold signify pessimism.
The sub-index on the job market recorded the biggest decline of 2.55 points this month to 113.2, suggesting the slowdown has started to affect the employment outlook, although the reading remains comfortably above the neutral mark, Wu said.
However, the job market is a lagging indicator, behind the economy by six to 12 months because companies tend to hold headcounts steady when coping with business fluctuations, he said.
That explains why the unemployment rate was 3.9 percent last month, the lowest in 15 years for August, despite reports of businesses downsizing, closures and unpaid leave.
“Domestic demand can still lend support to GDP growth going forward, with the advent of the high sales season for technology products,” Wu said, in light of the popularity of Apple Inc’s iPhone 6S.
Taiwanese companies are responsible for making the smartphone’s chips, casing, camera lens, batteries, touch screen and its final assembly.
The sub-index on consumption of durable goods registered a healthy 102.45 points, though it shed 1.2 points from last month, the survey showed.
Imported car sales picked up 26.7 percent year-on-year as the weaker yen and euro stimulated demand, Ministry of Finance data showed.
The sub-index on the economic prospects logged 76.65, down 0.55 points from last month, consistent with a potential economic downturn in the current quarter, Wu said.
The household income index also lost 1.2 points to 87.2, the survey showed.
The gauge on stock investment held steady at 73.2, thanks to government intervention to shore up local shares, Wu said.
The sub-index on inflation expectations gained 0.5 to 59.2, reflecting general concerns about price increases, he said.
The concern is bound to heighten in the aftermath of Typhoon Dujuan, which is likely to drive up vegetable and fruit prices, Wu said.
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