Bloomberg on Nostr: Euro Zone at Turning Point Needs Consumers to Get Out and Spend ========== The euro ...
Euro Zone at Turning Point Needs Consumers to Get Out and Spend
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The euro zone's economy is waiting for a resounding vote of confidence from its own consumers for its long-awaited rebound to finally take shape. With employment at a record, wages rising steeply and inflation not far from 2%, the conditions are there for people to get out and spend. The evidence so far suggests that didn't really happen during the first quarter. While data last week showed the region exited a recession and all four of the euro zone's biggest economies grew more than anticipated, the consumption picture was mixed, with both Germany and Italy still suffering from weak domestic demand. Services-sector activity in the euro zone reached an 11-month high in April, according to business surveys by S&P Global, with rising orders indicating that this momentum can be sustained. Economists surveyed by Bloomberg predict private consumption in Spain will grow at twice the euro area's pace, and nearly as much as in the US, where it's helping the economy to expand at a significantly faster clip. If such effects can replicate across the region, that would amount to a recovery that ECB officials have long awaited, and predicted — having consistently overestimated a pickup in private consumption. Their latest projections, from March, could still be too optimistic. Trying to work out the psyche of the region's fickle consumers has long been a key obsession for the ECB. President Christine Lagarde recently singled out household behavior as the biggest difference between the European and US economies, highlighting generous pandemic stimulus checks from Washington and fewer concerns over crises in the Middle East and Ukraine. It's in Germany, Europe's biggest economy, where the strength of consumption will make the most meaningful difference. Households there have been among the region's most cautious, unsettled by the implications of the Ukraine war on the country's cheap gas business model, and political indecision in a fractious government. But even there, things are starting to look brighter. Ifo institute President Clemens Fuest told Bloomberg Television last month that household spending may help growth in the second quarter. "What we've been waiting for, in a way, it looks like it's coming," he said.
#EuroZone #ConsumerSpending #EconomicRebound #Employment #Inflation #BusinessSurveys #Germany #Italy #Spain #Ecb
https://www.bloomberg.com/news/articles/2024-05-06/euro-zone-economy-needs-consumers-to-get-out-and-spend
==========
The euro zone's economy is waiting for a resounding vote of confidence from its own consumers for its long-awaited rebound to finally take shape. With employment at a record, wages rising steeply and inflation not far from 2%, the conditions are there for people to get out and spend. The evidence so far suggests that didn't really happen during the first quarter. While data last week showed the region exited a recession and all four of the euro zone's biggest economies grew more than anticipated, the consumption picture was mixed, with both Germany and Italy still suffering from weak domestic demand. Services-sector activity in the euro zone reached an 11-month high in April, according to business surveys by S&P Global, with rising orders indicating that this momentum can be sustained. Economists surveyed by Bloomberg predict private consumption in Spain will grow at twice the euro area's pace, and nearly as much as in the US, where it's helping the economy to expand at a significantly faster clip. If such effects can replicate across the region, that would amount to a recovery that ECB officials have long awaited, and predicted — having consistently overestimated a pickup in private consumption. Their latest projections, from March, could still be too optimistic. Trying to work out the psyche of the region's fickle consumers has long been a key obsession for the ECB. President Christine Lagarde recently singled out household behavior as the biggest difference between the European and US economies, highlighting generous pandemic stimulus checks from Washington and fewer concerns over crises in the Middle East and Ukraine. It's in Germany, Europe's biggest economy, where the strength of consumption will make the most meaningful difference. Households there have been among the region's most cautious, unsettled by the implications of the Ukraine war on the country's cheap gas business model, and political indecision in a fractious government. But even there, things are starting to look brighter. Ifo institute President Clemens Fuest told Bloomberg Television last month that household spending may help growth in the second quarter. "What we've been waiting for, in a way, it looks like it's coming," he said.
#EuroZone #ConsumerSpending #EconomicRebound #Employment #Inflation #BusinessSurveys #Germany #Italy #Spain #Ecb
https://www.bloomberg.com/news/articles/2024-05-06/euro-zone-economy-needs-consumers-to-get-out-and-spend