Wages and consumer confidence improve, but is it too late?

Javier Milei's government is taking steps to reassure markets as concerns grow about an impending economic recession, while investors are closely watching the libertarian president's electoral prospects. Two recent indicators have given the economy a slight boost, though the outlook remains uncertain.

The Consumer Confidence Index (ICC), compiled by Torcuato Di Tella University, rose 0.8% in October, following a 2.4% increase in September. The improvement was mainly driven by Buenos Aires, where the index surged 6.8%, largely reversing a decline from the previous month. The ICC is often used as a gauge for government confidence, which will be released soon. However, the correlation between the two indices has weakened in recent months.

On a positive note, wages have rebounded, with the registered sector seeing a 2.6% month-on-month increase in August. Adjusted for inflation, wages rose by about 0.9%. If this trend continues, it could provide some relief for the retail and services sectors. However, a brokerage firm warned that the recovery may not be timely enough to make a significant difference.

As the election draws closer, the political climate is overshadowing economic data. Analysts note that investors are less sensitive to economic indicators, with many believing that the economy is unlikely to improve enough to benefit Milei's electoral prospects. Milei himself admitted on Thursday that Argentina's indicators are not as strong as they once were, though he emphasized the "best movie in history" his administration has produced so far, citing improvements in poverty, inflation, and public safety.