Bank of Korea consumer sentiment index falls to 105.4 in October

The Bank of Korea said Tuesday its composite consumer sentiment index fell to 105.4 in October from 106.6 a month earlier.

Four of the index's six components pulled it down: the outlooks for living standards, household income, spending and future economic conditions each subtracted 0.3 to 0.4 points, while the current living conditions index was the only component to add to the total, contributing 0.3 points.

The central bank's monthly survey of 2,500 urban households, of which 2,238 responded, was conducted from Oct. 13 to 20. A reading above 100 means consumers are more optimistic than the 2003-2025 average, and October's figure stayed above that line.

Households' view of their own finances was mixed. The current living conditions index rose 1 point to 93, but the outlook for living standards fell 1 point to 97, household income expectations dropped 1 point to 101 and spending plans slipped 1 point to 109.

Judgements about the wider economy were more uniformly negative. The current economic conditions index fell 1 point to 82, the future economic outlook dropped 2 points to 88 and the outlook for job opportunities declined 2 points to 86. The index tracking expectations for interest rates fell 1 point to 127.

Expectations for prices and asset values also eased. The index for the expected level of prices dropped 1 point to 149, the outlook for house prices fell 1 point to 124 and the expected level of wages declined 2 points to 122.

Inflation expectations held steady. Consumers expect prices to rise 2.7 percent over the next year, unchanged from September, and 2.6 percent in each of the three- and five-year horizons. Their assessment of inflation over the past year eased 0.1 percentage point to 2.9 percent.

Asked to name the main drivers of expected inflation, 52.6 percent of respondents cited petroleum products, 36.0 percent pointed to agricultural, livestock and fisheries products and 30.4 percent named public utility charges, with multiple answers allowed. Expectations for rent rose 1.6 percentage points and those for personal services 1.2 points, while farm and fisheries products fell 3.9 points.