The Consumer Confidence Index expresses the "propensity to consume" in the following month, as a percentage score given by respondents on HILL's independent survey panel. Respondents are asked to rate their propensity to consume (i.e. their desire to buy products or use services) in the following month, taking 100 as the maximum propensity to consume. We have conducted these surveys every month since April 1993.

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Propensity to consume
for December 2010
56.6 points

The Consumer Confidence Index for December surged 4.9 points from November to 56.6 points, a gain of 1.0 point over December 2009. Since February this index has gained on-year for 11 straight months. The monthly average for 2010 came to 51.7 points, a gain of 0.9-point over 2009, which saw the lowest monthly average on record. The downward trend that had been in place since 2007 was halted in 2010.
However, there are some concerns about the future direction of the economy. The Cabinet Office judged in its October Indexes of Business Conditions and its November Monthly Economic Report that the economy has reached a standstill. Furthermore, the Cabinet Office's Consumer Confidence Index fell for the fifth straight month in November, prompting the government to downgrade its assessment of consumer sentiment to "weakening". As such, the economy's current conditions and future outlook remain cloudy. On the other hand, there are some bright spots that could support a recovery. The Nikkei 225 Average has topped the key 10,000-point line and the income situation has improved. According to the Monthly Labor Survey, base pay rose in November for the first time in 30 months and winter bonuses are expected to be bigger in 2010 for the first time in three years. Department store sales were also up in October for the first time in two years and eight months and there have been reports that cakes and special New Years dishes priced a bit higher compared to recent years have been moving quickly in year-end sales. A few rays of hope are shining through the otherwise cloudy economic environment. It will be interesting to see which trends emerge in this survey next month.

The Consumer Confidence Index for men increased 0.5 point from November to 49.7 points. During a typical year scores tend to increase significantly between November and December, but this was the smallest rate of growth for this period in the history of this survey. This score was up 1.1 point compared to December 2009, extending the streak of on-year gains for the sixth straight month. The average monthly score for men in 2010 was 46.5 points, an increase of 0.6 point over 2009 but still the second lowest average on record. On the other hand, the score for women surged 9.3 points from November to 63.6 points, a gain of 1.0 points over December 2009. This was the highest score for any December since 1997. The average monthly score for women in 2010 increased 1.2 points from 2009 to 56.9 points. This is one of the highest levels since 2001, trailing only 2006 and 2007 when the propensity to spend was particularly strong. While men were a bit more sensitive to the sluggish economic conditions, spending among women was spurred on by the typical year-end boost in consumption and a rebound from an extended period of penny-pinching. As such, there were stark contrasts in the December results by gender.

Both men and women on our panel indicated stronger desires to spend toward the year end / New Year holiday season. This was due in part to receiving winter bonuses, but women in particular expressed the desire to spend on major events such as Christmas, year-end parties and "preparations for New Years" as a reason for spending more.

In the simultaneous survey of lifestyle priorities, scores were the highest all year for both men and women regarding their propensities to spend on "daily (minor) purchases", "medium-sized purchases" and "major (expensive) purchases". Also the women's score for spending on "housework and household affairs" was particularly high due to the traditional year-end cleaning.

Propensity to consume
for November 2010
51.7 points

The Consumer Confidence Index for November rose 0.3 point from October to 51.7 points, an increase of 1.0 point over November of last year. This index has now gained year-on-year for ten straight months, but the size of these gains became smaller in October and November as the pace of recovery slowed somewhat.
The worst seems to be over for the income environment as in September the unemployment rate improved for three straight months and total cash earnings were up on-year for seven straight months. However, the Cabinet Office’s diffusion index (DI) for current conditions for September turned lower for the first time in one and a half years and the economic assessment was revised lowered for the first time in almost two years. Furthermore, the DIs for current and future economic conditions in the October Economy Watchers Survey both worsened and the Cabinet Office’s Consumer Confidence Index was lower in October for four straight months. The effects of various government stimulus measures ran out of steam, especially with the subsidy program for the purchase of environmentally friendly vehicles ending in September. The economic outlook remains clouded by the persistently strong yen and concerns about a deceleration for the global economy.
During a typical year this Consumer Confidence Index rises sharply in December. The average for 2010 stands at 51.2 points as of November, so appears to be on pace to easily top last year’s average of 50.8 points. Amid these difficult economic conditions, it will be interesting to see if the average score for 2010 can recover to the 51.6 point average for 2008.

The Consumer Confidence Index for men jumped 2.2 points from October to 49.2 points, which was a gain of 3.8 points over November of last year. The on-year score has increased for five straight months and this was the third highest score for any November since 2001. On the other hand, the score for women declined 1.6 points from October to 54.3 points. This score was down 1.7 points from November of 2009, marking the first on-year decline in ten months. Many members of our panel, both men and women, said they rushed to make some purchases before point allotments in the government’s Eco-Point system are reduced. The number of men with a more positive stance on spending increased. Conversely, many women said they wanted to spend less in November as their spending toward the end of the year will likely increase. This was probably one reason behind the lower scores for women.

In the simultaneous survey of lifestyle priorities there was not much movement in the propensity to spend on “daily (minor) purchases” and “medium-sized purchases” for both men and women, but the scores for “major (expensive) purchases” hit their highest levels for the year. This was probably due to preparations for the year-end and the rush to buy before eco-points were reduced.

Propensity to consume
for October 2010
51.4 points

The Consumer Confidence Index for October inched up 0.3 point from September to 51.4 points, a gain of 1.4 points over the same month last year. The average score for all of 2009 was a record low 50.8 points, however, this index has now gained on-year for nine straight months. The average score between January and October 2010 is 51.2 points, or 0.9 point over the average for 2009, but the index still remains stuck at a low level.

The DI of current business conditions in the Bank of Japan’s September Tankan report continued to improve, but conditions for the next three months were forecast to worsen for the first time in seven quarters. At the same time, business confidence in the September Economy Watchers Survey fell for the second straight month, prompting the government to downgrade its overall economic assessment for a second straight month. Opinions about the future direction of the economy remain very guarded due to the strong yen, declining stock prices, worries about the U.S. economy and the expiration of policies aimed at boosting demand. The Cabinet Office’s Consumer Confidence Index declined on-month in September for the third straight month, prompting a downgrade of its assessment of consumer sentiment for a second straight month. There are only two more months in 2010 and if our Consumer Confidence Index can continue rising on-year, the record low average score from last year will certainly be topped. This index tends to rise towards the end of the year, but economic uncertainties persist so movements over the next two months will be particularly interesting.

The Consumer Confidence Index for men moved up 0.4 point from September to 47.0 points, which was a gain of 1.7 points over October of last year. The on-year score has increased for four straight months, but still remains at a low level. The score for women was 55.9, an on-month gain of 0.4 point and an on-year gain of 1.3 points. The on-year score has increased for nine straight months with a steady recovery pace. The scores for both men and women were up in October both on-month and on-year, but as compared to September, a few more members of the panel expressed the desire “I want to cut back on spending and save a little more.” There was also a noticeable increase in those saying “there is nothing I want to buy right now”, particularly among men.

A simultaneous survey of lifestyle priorities showed that men were more inclined to spend on “daily (minor) purchases” and “medium-sized purchases”, but less likely to spend on “major (expensive) purchases” as compared to September. For women there was a big drop in their propensity to spend on “daily (minor) purchases”, suggesting they are becoming a little more carefully with their daily spending habits. Their desire to spend on “medium-sized purchases” and “major (expensive) purchases” was only off slightly.

Propensity to consume
for September 2010
51.1 points

The Consumer Confidence Index for September declined 3.8 points from August to 51.1 points, a gain of 2.2 points compared to September of last year. During a typical year the score for September tends to decline on-month due to a natural reaction for increased spending in August. However, the score for August this year was particularly high, so the reactionary decline in September was also a bit large. Many members of our panel said that they tried to cut back their consumption in September after spending a lot on travel and bargains in August.
The recovery trend has continued with this Consumer Confidence Index gaining on-year for eight straight months, but recent economic indicators suggest that the recovery is weakening. Indicators of future economic conditions have worsened and concerns that the economy will decelerate towards the end of the year are growing much stronger. The Cabinet Office’s July diffusion index (DI) for current conditions improved for the second straight month, but the score for future conditions turned lower for the first time in two months. Even though the economic assessment was maintained in the government’s September Monthly Economic Report, concerns about the future appear to be growing. The sudden appreciation of the yen and slowing overseas economies have clouded Japan’s economic outlook. Looking at the consumption-related indicators, the DI for future economic conditions in the September Economy Watchers Survey fell for a fourth straight month as the unusually hot weather kept people indoors and the strong yen / weak stocks chilled sentiment. Meanwhile, the Cabinet Office’s Consumer Confidence Index declined for a second straight month, prompting a downward revision for the assessment of consumer sentiment. Concerns about the future are starting to emerge in everyday life. Against this backdrop, it will be very interesting to see if the recovery for this Consumer Confidence Index can continue next month.

The Consumer Confidence Index for men declined 2.7 points from August to 46.6 points, an increase of 2.1 points compared to September 2009. The on-year score has increased for three straight months, but this was still the second lowest score for men for any September on record. Furthermore, the average score for the January-September period was 45.8, very close to the lowest average for this period ever (45.7) recorded last year. The score for women was 55.5, dropping a big 5.0 point on-month in reaction to the particularly large gain in August. The on-year score was up 2.2 points, rising for the eighth straight month. The average score for the January-September period was 56.5, marking a recovery pace 1.4 points above the average for the same period last year.

A simultaneous survey of lifestyle priorities showed that men were less inclined to spend on “daily (minor) purchases”, “medium-sized purchases” and “major (expensive) purchases” as compared to August, but these scores were all a bit above the average for this year. For women the propensity to spend increased for “daily (minor) purchases”, but was flat for “medium-sized purchases” and “major (expensive) purchases”.

Propensity to consume
for August 2010
54.9 points

The Consumer Confidence Index for August climbed 1.1 points from July to 54.9 points, a gain of 0.3 point over August of last year. This was the highest score for any month this year and the highest score for any August since 2000. The recovery in consumption has continued with this index now rising on-year for the seventh straight month.
The government maintained its assessment of the economy at “picking up steadily” in its August Monthly Economic Report. Also, the Cabinet Office’s diffusion index for June improved for the first time in two months for current conditions, but the scores for corporate production activities were negative, suggesting that some movements towards an economic recovery have turned sluggish. The diffusion index in the July Economy Watchers survey improved for the first time in three months, but the DI for future economic conditions fell for a third straight month. Likewise, the Cabinet Office’s Consumer Confidence Index worsened in July for the first time in seven months, indicating a sense of unease about the future direction of the economy. These indicators all seem to suggest that while current conditions are recovering, there are concerns about the future.
This index fell sharply in September of last year. Amid the current concerns about the future direction of the economy, what will be the impact of the recent appreciation of the yen and drop in share prices? The Consumer Confidence Index has been in a recovery trend, but a key test appears to be looming next month.

The Consumer Confidence Index for men jumped 1.6 points from July to 49.3 points, a gain of 0.3 point over August of last year. This score was up on-year for a second straight month, but the pace of recovery is still rather weak. The score for women was up 0.5 point from July to 60.5 points, a modest gain of 0.2 point over August of 2009. The score for women has topped 60 points for two straight months. This was also the second highest score for any August on record, just missing the record high of 60.6 points in August 1994. The index for women has become recovering steadily, rising on-year for seven straight months. Comments from panel members were seasonal in nature, with many saying they were eager to spend more on summer time leisure activities and travel. Women are still clearly more positive about spending, but the desire to spend among men also increased.

A simultaneous survey of lifestyle priorities showed that for both men and women the propensity to spend on “daily (minor) purchases” increased, on “medium-sized purchased” decreased and on “major (expensive) purchases” remained roughly flat. Scores were higher for “hobbies & pastimes” and “recreation & leisure” due to the summer vacation season. Many men in particular were eager to spend on items in the “life with your family” category.

Propensity to consume
for July 2010
53.8 points

The Consumer Confidence Index for July rose 3.2 points from June to 53.8 points, the highest score for this year and a gain of 1.3 points over July of last year. During a typical year the score will rise in July as summer bonuses are received and the summer holiday season kicks off. However, this was the first time that the score for July gained both on-month and on-year since 2006. The score has now risen on-year for six straight months. The rate of recovery slowed in May and June, but regained a little momentum in July.

Business sentiment in the Bank of Japan’s June Tankan report turned positive for the first time in two years. The government also upgraded its assessment of the economy for the first time in three months in its Monthly Economic Report for June. However, recently there has been an increase in indicators that cast some doubt over the economic outlook. These include the recent worsening of diffusion indexes, the Economy Watchers’ Survey and the unemployment rate. There are concerns that the pace of economic recovery will slow. On the other hand, it has been reported that the number of people planning summer vacations this year (domestic and overseas) will likely return to levels seen before the start of the financial crisis, while department stores, electronics mass retailers and other major retailers have enjoyed better sales this year compared to last year during the period when consumers had received their summer bonuses. These developments point to a brightening environment for consumer sentiment.
It will be interesting to see the score for August during this time of both improving sentiment and concerns about the future economic outlook.

The Consumer Confidence Index for men rose 1.9 points from June to 47.7 points, which was roughly even with the score for July 2009, the lowest score for any July on record. The recovery in sentiment for men has failed to gain much traction, possibly due to lingering concern about market trends such as the stronger yen and falling stock markets. Conversely, the score for women rose 4.6 points from June and 2.6 points compared to July of 2009 to 60.0 points, the highest score for any July since 2000. Sentiment among female consumers appears to have good momentum, having now risen on-year for six straight months. Many women on our panel said that they wanted to spend money on summer bargain sales, travel and leisure. Currently the propensity to spend is clearly stronger among women than men.

A simultaneous survey of lifestyle priorities showed that for men the propensity to spend increased for “medium-sized purchases” and “major (expensive) purchases”, but was flat for “daily (minor) purchases”. For women the propensity to spend increased for “medium-sized purchases”, but decreased for “daily (minor) purchases” and “major (expensive) purchases”.

Propensity to consume
for June 2010
50.6 points

During a typical year the Consumer Confidence Index tends to decline in June and this trend held true with the score for June 2010 dropping 1.2 points from May to 50.6 points. The score was unchanged from June of last year. The recovery trend appears to have lost momentum in May and June as compared to the March-April period. As a result, the average score for the January-June period came to 50.1 points. This was better than the 49.5 point average for the first half of last year, the lowest score on record, but was still the second lowest score for any first half.

There are growing concerns about the economic outlook. Looking at recent macroeconomic data, diffusion indices and the Economy Watchers’ Survey have turned negative due to unease about the European financial crisis, falling stock prices, a stronger yen and worsening unemployment for two straight months. On the other hand, there are signs that income conditions are improving. Specifically, overall cash wages increased for two straight months and bonuses this summer at large corporations are expected to be up for the first time in two years (according to a Keidanren survey). The Cabinet Office’s Consumer Confidence Survey for May was up on-month for the fifth straight month, indicating that sentiment among households continues to improve. It will be important to see how these trends carry over into the second half of the year. During a typical year the propensity to spend increases in July as summer bonuses are received and the summer vacation season gets underway. As such, a big recovery is possible.

The Consumer Confidence Index for men rose 0.8 point from May to 45.8 points, a decline of 0.4 point from June of last year. This score has declined on-year for the second straight month. The economic turbulence due to the financial unease originating from Europe still seems to be having an impact. The average score for men during the first half was 44.8 points, the lowest on record. The recovery for men has hit a standstill. The score for women fell 3.2 points from May to 55.4 points, a 0.5-point improvement over June of last year. This score has improved on-year for five straight months. The first half average for women was 55.4 points, an increase of 1.3 points compared to the first half of 2009. So the recovery in sentiment among women appears to still be on track. Both men and women on the panel provided various reasons for not wanting to spend in June such as “I spent too much during the Golden Week holiday,” “I want to save for the summer” and “I haven’t gotten my summer bonus yet.” These comments suggest spending may increase in July.

A simultaneous survey of lifestyle priorities showed that for men the propensity to spend increased for “daily (minor) purchases” and “major (expensive) purchases” but declined for “medium-sized purchases”. For women the propensity to spend was up for “daily (minor) purchases”, down for “medium-sized purchases” and unchanged for “major (expensive) purchases”.

Propensity to consume
for May 2010
51.8 points

The Consumer Confidence Index for May climbed 1.2 points from April to 51.8 points, a 0.5-point gain over May of last year. The index continues to recover, having now risen on-month for three straight months and on-year for four straight months. However, the pace of recovery slowed somewhat in May due mainly to a drop in the score for men. Consumer confidence among men tends to be more easily swayed by macroeconomic factors and shares prices. It is likely that sentiment for men was chilled by the Greek financial crisis and the resultant drop in global share prices, which occurred during the May survey period. It will be important to monitor the scores next month to determine if this is just a temporary phenomenon.

Recently released economic indicators continue to improve / rise. The Cabinet Office’s Index of Leading Economic Indicators for March rose for a 13th straight month and by the biggest monthly jump on record, underscoring the economy’s recovery. The Cabinet Office’s Consumer Confidence Index for March improved for a third straight month, prompting the government to raise its assessment of consumer confidence for a second straight month. Likewise, in the April Economy Watchers Survey current and future economic conditions DIs both improved for the fifth straight month. The government’s Monthly Economic Report for April also concluded that business sentiment is improving and personal consumption is recovering. Newspapers reported that spending on travel, eating out and shopping were strong during this year’s Gold Week holiday. Many members of our survey panel expressed desires to spend on travel and clothes. It would appear that consumption is improving even for items not affected by government stimulus measures.

The Consumer Confidence Index for men retreated 0.8 point from April to 45.0 points, which was a 1.0-point decline versus May of last year. On the other hand, the score for women increased 3.2 points from April, to 58.6 points, a gain of 1.8 points over May of last year. The score for men was down on-month and on-year for the first time in three months, and was the lowest score for any May on record. As mentioned above, sentiment among men was probably impacted by the Greek financial crisis and the resultant drop in global stock prices. The score for women was up on-year for the fourth straight month and was the highest May score since 2000. As a result, the difference between the scores for men and women expanded to 13.6 points. Sentiment among women is relatively strong, with many female members of the panel making upbeat comments about their propensity to spend.

A simultaneous survey of lifestyle priorities showed that for men the propensity to spend on “daily (minor) purchases”, which improved last month, again fell in May. Their desire to spend was up for “medium-sized purchases”, but down for “major (expensive) purchases”. For women the propensity to spend improved for all three categories, highlighting the strong sentiment among female consumers. Scores for both men and women were up for “hobbies and pastimes” and “recreation and leisure” due to the Golden week holiday.

Propensity to consume
for April 2010
50.6 points

The Consumer Confidence Index for April rose 0.5 point from March to 50.6 points, a gain of 2.1 points over the same month last year. This was the second lowest score for any April on record, but the index has now increased on-month for two straight months and on-year for three straight months. Even though the scores have remained at low levels since the start of 2010, there appears to be some signs of a recovery compared to the same periods last year.
According to economic assessments in the government’s March Monthly Economic Report and the Bank of Japan’s Tankan report, the economy has yet to reach a true recovery phase, but gradual improvements are underway. Share prices have also been rising recently. In the Cabinet Office’s March Economy Watchers Survey there were stark improvements for household-related indicators, with both the current and future economic conditions DIs rising for a fourth straight month. Supermarket and department store sales continued to fall on-year in February, but at a slower pace. Even though the employment and income conditions remain very tough, the recent trends in this survey suggest that sentiment among consumers is gradually improving. During a typical year there is a strong tendency for this index to increase in May. It will be interesting to see if this improvement in sentiment carries into next month.

The Consumer Confidence Index for men climbed 1.1 points from March to 45.8 points, which was a 1.8-point gain over April of last year. The score for women was roughly unchanged from March at 55.4 points (a 0.1-point dip), but this was a solid 2.4-point gain over April of last year. The scores for men have increased on-month and on-year for two straight months, while the scores for women have climbed on-year for three straight months. The recovery has been particularly strong for women, with an average on-year improvement of 1.4-points each month between January and April.
Both men and women on our panel expressed a wiliness to spend more actively as spring approaches. Many of the panel members with lower scores for April said that they were holding off on spending this month in order to set money aside for the upcoming Golden Week holidays. This opinion suggests their scores will be higher in May.

A simultaneous survey of life style priorities showed that for men the propensity to spend on “daily (minor) purchases” recovered to previous levels after a sharp drop in March, while the desire to spend increased for “major (expensive) purchases” and was unchanged for “medium-sized purchases”. For women the propensity to spend declined for “daily (minor) purchases” and “medium-sized purchases”, while remaining unchanged for major (expensive) purchases.

Propensity to consume
for March 2010
50.1 points

The Consumer Confidence Index for March climbed 2.3 points from February to 50.1 points, which was a gain of 2.3 points over March of last year. This was the second lowest score for any March on record, but the index has now risen on-year for two straight months. In particular, the big on-year gain for March provides a sense that consumption is gaining strength for the first time in a long while.
The difficult employment conditions, deflation and other factors raise some concerns about the sustainability of the economic recovery, but recent macroeconomic indicators suggest that the recovery is gradually spreading. Unemployment in January fell below 5% for the first time in 10 months and the economic assessment in the government’s Monthly Economic Report for March was upgraded for the first time in eight months. January total cash wages also increased on-year for the first time in 20 months, retail sales rose for the first time in 17 months and the economic assessment in the February Economy Watchers’ Survey was also revised upward. So the indicators closely linked to the everyday lives of consumers have become a bit brighter. These conditions heighten expectations that the index will continue rising in April.
The Consumer Confidence Index for men rose 1.3 points from February to 44.7 points, which was a gain of 0.8 point over March of last year. The score for women increased 3.3 points to 55.5 points, a gain of 3.7 points versus March 2009. The scores for both women and men were up both on-month and on-year, but this was still the second lowest March score for men on record. On-year scores for women have been improving strongly since August, helping to lift the overall index.
Opinions among panel members were a bit mixed with some of the men and women saying “there is nothing I want to buy right now”, while others expressed stronger interest in wanting to buy something. Some female panel members noted an inclination toward seasonal-based consumption with such comments as “I want to dress up for spring”, “I want new clothes for my graduation ceremony / entrance ceremony” and “I want to be ready for my new career.”
A simultaneous survey of lifestyle priorities showed that for men the propensity to spend increased from February for “medium-sized purchases”, but decreased for “daily (minor) purchases” and “major (expensive) purchases.” The decline in the desire to spend on “daily (minor) purchased” was particularly large. For women the propensity to spend on “major (expensive) purchases” declined from February, but the scores for “daily (minor) purchases” and “medium-sized purchases” rose sharply, returning to the strong levels seen between November of last year and January of this year.

Propensity to consume
for February 2010
47.8 points

The February Consumer Confidence Index fell 2.0 points from January to 47.8 points, which marked a modest 0.3-point increase over February of last year. Despite the slight on-year improvement, this was still the second lowest score for any February on record. The propensity to spend has remained weak for both January and February.
The Coincident Index in the Cabinet Office’s Indexes of Business Conditions for December rose for the ninth straight month due to growth for both manufacturing sector production and the Industrial Production Index. However, the economic recovery seems weak as increased production has so far done very little to help improve employment and income conditions. In its Monthly Economic Report for January the Cabinet Office noted some improvements, but still assessed that the economy “remains in a difficult situation” due to no real improvement for employment conditions. Even though a handful of macroeconomic indicators have improved, consumers still remain concerned about the future and so the propensity to spend is not improving. During a typical year the scores for March are higher than those for February. It will be interesting to monitor this survey next month to see if this pattern holds true amid the current difficult conditions.

The Consumer Confidence Index for men slipped 0.7 point from January to 43.4 points, which was down 0.5 point from February of last year. The score for men has fallen on-year for two straight months and this was also the second lowest score for any February on record. The index for women slumped 3.2 points from January to 52.2 points. This was an improvement of 1.3 points compared to February 2009, but the score still remains at a very low level. Many members of the panel cited “concerns about the future” and a “lack of money” as reasons for reduced spending. There seemed to be a strong inclination to save in February after spending over the year-end / New Year period. Several men and women also said “there was nothing I really wanted to buy this month.” This is because they probably already took advantage of their winter bonuses and the New Year bargain sales to make desired purchases.

A simultaneous survey of lifestyle priorities showed that for men the propensity to spend on the three categories of “daily (minor) purchases”, “medium-sized purchases” and “major (expensive) purchases” were all higher compared to January, but the scores for “daily (minor) purchases” and “medium-sized purchases” remain at very low levels. On the other hand, the scores for women were down from January for all three categories. In particular, there was a sizable drop for “daily (minor) purchases”, which had risen for several months. This is likely a reaction to increased spending during the year-end / New Year period.

Propensity to consume
for January 2010
49.8 points

The Consumer Confidence Index for January fell 5.8 points from December to 49.8 points, which was also down 1.8 points compared to January of 2009. During a typical year the score tends to drop in January after an uptick in December, but this was the first time ever that the score for January fell below 50 points. This is the lowest level for the Consumer Confidence Index to start a new year in the history of this survey. The poor propensity to spend has clearly carried over from last year.
The December Monthly Economic Report and the Cabinet Office’s Index of Business Conditions reported improvements in economic conditions, but these improvements are still not being felt in the day-to-day lives of consumers. The employment and income conditions remain severe. Specifically, the unemployment rate again worsened in November and total cash earnings fell for the 18th straight month. The December Economy Watchers’ Survey rose for the first time in three months, but improvements in personal consumption-related indicators have been losing momentum. Furthermore, retailers reported seeing many cautious, bargain-oriented shoppers during the popular sales marking the start of the New Year. February scores are typically among the lowest for any given year. It will be interesting to see what the score will be next month after the index starts 2010 at the lowest level for any year on record.

The Consumer Confidence Index for men sank 4.5 points from December to 44.1 points, which was down 2 points from January of last year. This was also the lowest score on record for the relevant month for the second straight month. The score for women tumbled 7.2 points to 55.4, a drop of 1.7 points from January 2009. This was the third lowest score for any January on record. This was largely due to seasonal factors, as many men and women on the panel said that they increased consumption towards the end of last year and so curtailed their spending in January. However, some men on the panel also cited reduced incomes, particularly smaller bonuses, as well as fears that the economy will continue worsening. Some women on the panel said that they were curtailing their spending by only buying necessities, but there were also those who said the New Year’s bargain sales increased their desire to spend. This is probably one facet of the above-mentioned cautious, bargain-oriented shopping.

A simultaneous survey of lifestyle priorities showed that for men the propensity to spend on the three categories of “daily (minor) purchases”, “medium-sized purchases” and “major (expensive) purchases were all at low levels and lower than in December. The scores for women remained at fairly high levels for all three categories. In particular, the score for “daily (minor) purchases” increased on-year for the fifth straight month.

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