Eurozone: Consumers still wary of current economic conditions - ING

Bert Colijn, Senior Economist at ING explained that the weak upward trend in consumer confidence is unlikely to push consumption much higher with weak job growth and higher oil prices.

Key Quotes: 

“Consumer confidence increased from -8.2 to -8 in October, which was the second month of improving confidence in a row after declines in summer.”

“Confidence is still below June’s pre-EU referendum reading of -7.2 and well below the March 2015 peak of -3.6, indicating that consumers are still quite wary of current economic conditions.”

“As unemployment has stagnated at 10.1% since April and price growth is picking up somewhat because of higher oil prices, consumers do not have an awful lot to cheer about at the moment. This means that modest growth in domestic demand is likely set to continue, making a strong recovery of consumption growth in 4Q unlikely. That is consistent with the view of somewhat weaker GDP growth in 4Q of 0.2% QoQ.”