GFK consumer confidence index for November unexpectedly declined from 10 to 9.7. Market expectations were for an unchanged reading at 10. It is the first time the indicator has fallen below 10 since June.
GFK said the greater pessimism “is not caused primarily by the hard facts of domestic trends, such as those relating to employment and income levels. It is more a consequence of an external trade environment that has become increasingly difficult.”
Despite the decline in November, the index remained at historically high level signalling a positive trend of consumer spending in Q4 even if it is a source of concern ahead of Christmas shopping season.
However, we do not pencil in a marked weakening of consumer spending in the short term as the improvement of economic activity signalled by business confidence indices would sustain the labour market and as a consequence consumer spending.