Consumer sentiment collapses
The public’s views on economic prospects took a negative turn amid a tepid job market, unstable housing prices and other downbeat economic indicators.
The latest results, announced by Korea’s central bank on Tuesday, indicate that the August index dipped to the same level as when former President Park Geun-hye’s influence-peddling scandal caused political whirlwinds.
The Bank of Korea said that the composite consumer sentiment index (CCSI) for this month stood at 99.2, down 1.8 points from the previous month. A reading above 100 points indicates that a majority of survey participants have a positive outlook on the national economy, while a reading below 100 indicates that most have negative views.
The central bank attributed the downturn to a combination of economic factors, including the sluggish job market and a trade row between the United States and China.
“August’s CCSI was affected by the disappointing jobs report, the increasing prices of necessities, worries linked to the trade dispute between the United States and China and lower stock prices stemming from financial fluctuations in the emerging markets,” the Bank of Korea said in a statement.
As the order suggests, the major concern was job conditions as the index for job opportunity declined 2 points to 85 compared to the previous month.
The negative outlook follows a series of grim jobs reports. Only 5,000 new jobs were created in July compared to the same month one year earlier, according to Statistics Korea. That’s the lowest number of new jobs created in a month in eight and a half years.
The hike in the prices of key vegetables and household items brought on by the prolonged drought and sizzling heat over the previous weeks pushed up people’s prospects on consumer prices by two points to 143.
Many forecast that housing prices will continue to climb, as the index for price trends in the real estate market surged a whopping 11 points in August to 109. Many areas in Seoul saw a steep rise in housing prices this month.
The average price of apartments in Seoul hit a seven-month high as of Aug. 20, growing 0.37 percent over the previous week, according to the Korea Appraisal Board, a government-run real estate information provider.
The BOK survey found household finance sentiment grew more pessimistic, as it was down 2 points at 89. But in terms of future prospects for household finances and income, the indexes mostly remained flat.
BY PARK EUN-JEE [firstname.lastname@example.org]
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