Sluggish recovery after sharp fall

The inverse relationship between household income levels and the rate of recovery in consumer sentiments is both disappointing and counter-intuitive. But the data is unambiguous

Consumer sentiments have been extraordinarily sluggish in recovering from the pandemic. Infect­ions have dropped dramatically and vaccinations have accelerated impressively. Mobility has imp­ro­ved and the economy seems to be slowly limping back to a semb­lance of normalcy. Many fast-frequency indicators of economic activity are at levels higher than they were in the pre-pandemic times. But not so consumer sentiments, which remain much lower than they were in pre-Covid days since their improvement has progressed at a much slower pace.

The index of consumer sentiments in October 2021 was 13.2 per cent higher than in October 2020 but it was still a