Confidence in the economy continued to remain low among consumers in November despite a marginal improvement from an all-time low recorded in September. The negative perception of the economy increased sharply among salaried workers.
This could be due to the fact that most jobs lost in April due to the COVID-19-related lockdown were regained in July, except in the case of salaried workers. Compared to October, the number of employed people decreased by over 3.5 million in November, reversing the recovery post-lockdown.
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The negative perception among consumers about the economy, income, employment, and price levels continued to persist in Nov. 2020 after peaking in Sept. 2020. The graph depicts the % of respondents who gave a particular answer in the RBI consumer confidence survey.
In Nov. 2020, 79.5% respondents said the employment situation had worsened and 63% said income levels had decreased compared to Nov. 2019.
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Growing dissatisfaction
The negative perception of the economy increased the most among salaried workers. From just 14% of salaried workers who felt that their household income had worsened compared to a year ago in July 2019, the share went up to 58% in July 2020. The increase of 44 % points is the biggest increase among all types of workers.
No recovery
In April, job losses were higher among small traders and entrepreneurs than among salaried workers. By July, most of those who had lost jobs among the first two categories regained employment, but losses persisted among salaried workers. CMIE data infer that salaried employees were less likely to lose jobs but also unlikely to regain lost jobs.
Employment plateaus
After a steep fall in the number of people employed post-lockdown, the job market initially revived at a brisk pace. However, it slowed down significantly since July and declined marginally in October and November 2020.
Source: CMIE, RBI consumer confidence survey