Consumer confidence soars

Consumer confidence increased 3.9 points in May compared to April in the seasonally adjusted series, the Getulio Vargas Foundation (FGV) said on Monday. The Consumer Confidence Index (ICC) rose to 62.1 points. The result should be interpreted as an accommodation, recovering only 13.2% of the 29.6 points decrease accumulated in the previous two months, FGV said. "The rise in confidence in May was influenced by the revision of expectations, with a slight reduction in pessimism compared to the following months. At the present time, most consumers feel the impacts of the pandemic and assess worsening in the general and financial economic situation of households. With the household budget compromised by the need for social isolation leading to cases of income reduction by dismissal, suspension of work or proportional reduction of wages and working hours by at least one family member, low-income families are currently the ones who experience difficulties the most. Concern about employment and high uncertainty will keep consumers cautious in the coming months," said Viviane Seda Bittencourt, coordinator of the Surveys of fgv's Brazilian Institute of Economics (Ibre/FGV), in an official statement. In May, the Current Situation Index (ISA) fell 0.6 point to 65.0 points, the lowest level since December 2016, when it was at 64.8 points. The Expectations Index (EI) rose 6.7 points to 61.7 points. The component that measures satisfaction with the economic situation today fell 0.9 point to 71.9 points. The item that evaluates family finances at the present time fell 0.3 point to 58.8 points. Expectations on family finances in the coming months rose 8.8 points after four straight months of falls. The advance in May, however, recovers only 22.9% of the accumulated loss since the beginning of the year in this component. The item that measures optimism about the economic situation in the future increased 4.4 points in May to 71.6 points, while the component that measures the intention of purchases of durable goods in the coming months increased 6.3 points to 27.4 points. There was an improvement in confidence in all family income brackets, except for the poorest families, who receive up to R$ 2.1 thousand, with a drop of 3.7 points in the confidence indicator driven by a further deterioration in expectations in May. Families with higher purchasing power, with monthly income above R$ 9.6 thousand, recorded an increase of 9.0 points of confidence, with recovery of both expectations and a perception of improvement in the current situation. The Consumer Survey collected information from 1,808 households in seven capitals, with interviews between May 2 and 20.