31/10/2011: Euro area Consumer Sentiment & Expectations: October 2011

In line with the latest inflation data (see the previous post), latest data for EU27 and Euro area consumer expectations continued to move in the direction of further weaknesses.

Data for October shows that for EU27:

• Consumer confidence fell from -19 in September to -20 in October, the lowest level since July 2009. A year ago, Consumer Confidence index stood at -12.
• Financial Situation sentiment for the last 12 months period remained at -18 in October, same as in September, down from -17 in August. A year ago, sub-index stood at -14.
• Financial Sentiment expectations for 12 months ahead has also remained at -9 in October, same as in September and down on -8 in August. In October 2010 the sub-index was at -5.

 As chart below illustrates:

• General Economic Situation perception index for next 12 months fell to -29 in October from -27 in September. The sub-index is now at the lowest level since May 2009 an is down on -12 reading in October 2010.
• Unemployment Expectations over the next 12 months sub-index rose from 32 in September to 36 in October - the highest level since March 2010. A year ago, sub-index stood at 26.

Euro area data was showing similar weaknesses to EU27:

• Consumer confidence fell from -19 in September to -20 in October, the lowest level since August 2009. A year ago, Consumer Confidence index stood at -11.
• Financial Situation sentiment for the last 12 months period improved to -16 in October, from -17 in September, but still down down from -15 in April-August. A year ago, sub-index stood at -14.
• Financial Sentiment expectations for 12 months ahead has also remained at -9 in October, same as in September and down on -7 in August. In October 2010 the sub-index was at -6.

• General Economic Situation perception index for next 12 months fell to -29 in October from -27 in September. The sub-index is now at the lowest level since May 2009 an is down on -10 reading in October 2010.
• Unemployment Expectations over the next 12 months sub-index rose from 30 in September to 33 in October - the highest level since May 2010. A year ago, sub-index stood at 22.

Much of this evidence is consistent with the latest unemployment figures reported today with Euro area unemployment up to 10.2% in September (EU27 figure at 9.7%) up from 10.1 in August 2011 (9.6% for EU27).