PARIS (MNI) – Eurozone consumer morale eroded more than expected in
August, extending the downward trend of the past two months, according
to the European Commission’s preliminary estimate released Thursday.
After a 2.2-point slide since May, the indicator fell another 3.1
points in August to a 38-month low of -24.6 to stand nearly 12 points
below the long-term average. Most analysts polled by MNI had expected a
decline of at most half a point.
Between September and July, the sentiment index had hovered in a
fairly narrow range of -19.1 to -21.5 with a peak in March when
consumers felt that inflation was receding and economic prospects might
improve.
Since June, consumers’ medium-term outlook for the economy has
deteriorated markedly, reaching an eight-month low in July and
exacerbating unemployment fears. Inflation worries also began mounting
from a trough in June, weighing on buying-propensity for major
purchases.
While the latest PMI polls suggest the economy may be bottoming
out, any tangible recovery in the labor market is still a long way away,
and concerns over the sovereign debt crisis may continue to cloud
economic prospects. The rebound in petrol prices since June is likely to
depress sentiment and purchasing prospects further.
The final confidence figure for August, along with the other
components of the Commission’s comprehensive sentiment survey, should be
released next Thursday.
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