Eurozone Consumer Confidence Rises in January; Highest Since Aug 2000
January 23 2018 - 10:58AM
Dow Jones News
By Paul Hannon
The surge in optimism among eurozone consumers that helped make
2017 a banner year for the currency area's economy has continued
into 2018, a sign that growth is likely to remain strong over
coming months.
The European Commission on Tuesday said its monthly measure of
sentiment rose to 1.3 in January from 0.5 in December, reaching its
highest level since August 2000. Economists surveyed by The Wall
Street Journal last week had anticipated a much more modest rise to
0.6.
Business surveys and official data suggest the eurozone economy
grew by around 2.4% in 2017, the fastest rate in a decade. And
economists increasingly expect 2018 to come close to matching that
performance. The International Monetary Fund on Monday raised its
growth forecast for the year to 2.2% from 1.9% in October.
More upbeat consumers have helped drive that pickup in growth,
since households tend to spend more freely when they aren't
pessimistic about their prospects. The rise in optimism likely
reflects a gradual but significant decline in unemployment since
the start of the recovery in late 2013.
The January rise in confidence suggests consumers are no more
sensitive to political uncertainties than they were in 2017, when
they shrugged off elections in the Netherlands, France, Germany and
Austria. The next big vote will take place in Italy in March, and
opinion polls suggest it will produce a hung parliament that will
struggle to form a strong, stable government capable of rebooting
the troubled economy.
The strength of confidence will likely reassure policy makers at
the European Central Bank that they have made the right decision in
cutting their monthly bond purchases from January, and if sustained
could increase their willingness to move more quickly to remove the
stimulus they have provided since the financial crisis.
Write to Paul Hannon at Paul.Hannon@wsj.com
(END) Dow Jones Newswires
January 23, 2018 10:43 ET (15:43 GMT)
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