4 RBI consumer confidence survey data corroborates the urban labour market weakness story

While India does not have an official source of high-frequency data on employment, the Reserve Bank of India’s Consumer Confidence Surveys (CCS) offer an insight into prevailing sentiment vis-a-vis employment and incomes in the cities. The CCS is conducted every two months in the 13 biggest cities of India, the latest round having been done in January 2021. Among other things, the CCS seeks responses on perception around incomes and employment compared to a year ago. On both these counts, the share of respondents who reported a deterioration far exceeded those who reported an improvement, dragging the net perception into negative territory. The fact that things have not improved despite removal of lockdown restrictions and economic activity related private indices such a Purchasing Managers’ Indices and the Nomura India Business Resumption Index doing very well suggests that employment and wages continue to be weak even though production might be improving.