THE LATEST YouGov / Cebr Consumer Confidence Index figures have rallied slightly, but there are warning signs ahead for the economy in the next few months.
Following a fall in the index in October, there was a welcome increase of 2.1 points to 111.5 in November. This is, however, still below the levels seen throughout the spring and summer. The good news can be underlined by the fact that five of the eight individual components that make up the index improved in November.
This suggests that the recovery has now begun to reach people’s pockets. The largest increase came in consumers’ expectation of their household financial situation over the next 12 months. This particular measure is at its highest level since YouGov began collecting data in 2009. This is linked with the positive news that real wages rose for the first time in five years.
However, several underlying figures point to a slowdown in the pace of growth. Both the backward- and the forward-looking measures of job security have declined. Over the past 30 days, job security fell to its lowest level since April 2014 and the forward-looking measure is at its lowest since June.
We can infer that at the point at which consumers are starting to feel the real benefits of growth, they are becoming more circumspect and judicious about employment prospects.
The danger of this is the willingness to spend in the long term. It’s crucial to differentiate between unemployment decreasing, and the persistent nature of underemployment that will continue to be a hindrance to improved household finances.
So while the increase in consumer confidence is welcome and shows a certain resilience, there is very much the suspicion that slower growth is on the way for 2015.
December’s figures will tell us more about how the land lies ahead of New Year.
Stephan Shakespeare in the chief executive of YouGov