Index of consumer sentiments rose by a robust 7.1% to a 30-month high in September: CMIE

The index of consumer sentiments rose by a robust 7.1% to a 30-month high in September which was the month packed with festivities across the nation, the Centre for Monitoring Indian Economy said. However, the first two weeks of October have shown a dip and all hopes are now on the week around Diwali.

As per the CMIE’s Consumer Pyramids Household Survey (CPHS), the unemployment rate dropped to a four-year low of 6.3% and the index of consumer sentiments rose to a 30-month high by 7.1% in September.

While the urban consumer sentiments rose by 9.3%, the rural sentiments were up by 5.6% with the respective indices of consumer sentiments in both urban and rural India being at their highest in 30 months bringing rejoice to consumer goods companies, CMIE said in its weekly labour market analysis.


Even the two components of the Index of Consumer Sentiments (ICS), the Index of Current Economic Conditions (ICC) and the Index of Consumer Expectations (ICE), recorded handsome gains during September.

While the ICC rose by 7.9%, the ICE was up by 6.5% with gains registered in both rural and urban regions. As per the CMIE data, the urban ICC increased by 8.3% and the rural ICC was up by 7.4%.

“Households’ perceptions regarding their current well-being seem to have improved quite substantially in September. This is somewhat in line with the improvement we see in the employment data,” CMIE said, adding that employment in urban regions improved by 1.4% and rural employment increased by 2.9%.

According to CMIE, neither high inflation nor high interest rates dampened spirits of the Indian consumers as its CPHS has recorded a sharp increase in the propensity of households to buy consumer durables in September.

In August 2022, 10.9% of households believed that it was a better time to buy consumer durables compared to a year ago while in September it shot up to 16.2%. Though still below the 20-30% range in the pre-Covid period, it has gained since April 2022 when this ratio has ranged between 10 and 13%, it said.

“This should be great news to all consumer goods companies as it comes when India is on the eve of its peak festive season,” it added

However, October did not begin on a strong note with the ICS falling by 0.7% in the week ended October 2 and then by another 3.2% in the week ended October 10 with both declines concentrated in rural India.

“Urban India pencilled strong growth in the ICS in both weeks and the propensity to buy consumer durables vaulted with nearly 24%of the households considered this to be a better time to buy consumer durables than during a year ago,” it said.

“Although rural India has lost a little steam, its 30-day moving average ICS is at its peak since April 2020. This is very promising for the ensuing festival season,” CMIE concluded.