Consumers in the 17 countries that share the euro continued to become less pessimistic in September, but with unemployment still close to record highs and wages growing more slowly than inflation, that is unlikely to herald a sharp pickup in spending.
The European Commission Friday said its preliminary estimate for the headline measure of consumer confidence in the currency area rose to -14.9 from -15.6 in August to reach its highest level since July 2011.
The improvement in consumer confidence has been underway since December 2012, and is a positive development for the currency area.
Rising confidence was one reason consumer spending picked up slightly in the second quarter of this year, helping the economy return to growth after a contraction that lasted 18 months.
However, the confidence measure remains below its average going back to 1990 of -13.3, reflecting the fact that the unemployment rate has yet to fall from record highs, while wages have recently been growing less rapidly than prices, resulting in a fall in real incomes for many.
It is therefore unlikely that consumers will spend much more freely in coming months.
Indeed, figures for July showed retail sales rose just 0.1% from the previous month, while figures released last week showed new car registrations in the European Union fell to the lowest level in more than 20 years in August.
New registrations, a proxy for sales, for the first eight months of the year also fell to their lowest level since 1990.
nasdaq.com
The European Commission Friday said its preliminary estimate for the headline measure of consumer confidence in the currency area rose to -14.9 from -15.6 in August to reach its highest level since July 2011.
The improvement in consumer confidence has been underway since December 2012, and is a positive development for the currency area.
Rising confidence was one reason consumer spending picked up slightly in the second quarter of this year, helping the economy return to growth after a contraction that lasted 18 months.
However, the confidence measure remains below its average going back to 1990 of -13.3, reflecting the fact that the unemployment rate has yet to fall from record highs, while wages have recently been growing less rapidly than prices, resulting in a fall in real incomes for many.
It is therefore unlikely that consumers will spend much more freely in coming months.
Indeed, figures for July showed retail sales rose just 0.1% from the previous month, while figures released last week showed new car registrations in the European Union fell to the lowest level in more than 20 years in August.
New registrations, a proxy for sales, for the first eight months of the year also fell to their lowest level since 1990.
nasdaq.com
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