South Korean Confidence Continues Its Slow Progress in December

Korean consumer confidence continues to show progress. While the overall index flattened at 107 this month, it held the jump to 107 that it made in November from 106 in October. The rate of growth in overall sentiment at 3.9% (SAAR) over 3-months is nearly identical to its 4% pace over 12-months.

The domestic economic situation is advancing extremely rapidly in South Korea. However, it is only `catching up' to the progress in overall living standards as well as with the sentiment index overall. The domestic economic situation stands in the 63rd percentile of its historic rank while the overall living standards are positioned in the 68th percentile of their historic queue.

The queue measures allow us to evaluate the position of the month's responses in historic profile while the growth rates speak to momentum. The rank responses show how very contained inflation is expected to be. Its assessment has been lower than this month's evaluation only about 7% of the time. On the other hand, household income changes stand in the 74th percentile of their historic queue; this response has been higher historically only about 25% of the time.

Despite the obvious progress and gain in expectations, South Korean spending plans have been receding steadily, over 3-month, 6-month and 12-month. Their historic standing is only in the 42nd percentile of their historic queue- below the mid point. While Koreans are upbeat in their `expectations' it is clear that their current actions continue to lag behind these expectations. This has been a more or less worldwide phenomenon. Nowhere in the world does an improvement in conditions that seem to multiply upon itself. Actual improvement - even expectations of improvement - are acted upon, instead, with some degree of skepticism. No economy has really been able to jumpstart growth. Rather where growth emerges it continues to be slow and reluctant. And so it is in South Korea too.