Consumer sentiments lag household income

Consumer sentiments are important because they reflect the intangible component of households' economic decisions

The index of consumer sentiments rose by two per cent in February 2021, over its level in January. It had improved by 1.7 per cent in January and by 2.7 per cent in December 2019. There is a steady improvement in consumer sentiments. But, they are still a far cry from the levels seen before the lockdown.

The index (which has a base of 100 in September-December 2015) was at 55.1 in February 2021. A year ago, which was the month just before the lockdown impact began, it was at 105.3. Consumer sentiments therefore, a full year after the lockdown