Eurozone consumer confidence halts its decline in July

After a significant drop in confidence from 0.2 to -0.6 in June, consumer confidence was stable in July. The slide seen over the past months halted, despite no respite in trade and other geopolitical tensions. Last month, the assessment of the general economic situation deteriorated, although the personal financial outlook and employment remained positive. The latter part of the story has hardly changed as the employment outlook continues to be very favourable in the current environment of increasing labour shortages in many Eurozone countries.

The heyday for Eurozone consumer optimism seems to be behind us, not just because of trade and political tensions. Thanks to the jump in energy prices, inflation is hovering around 2%, and as wage growth has only moved up slowly, purchasing power hasn’t improved much. Add to that the increased uncertainty around the global economic situation that is likely to drag on, and we get a view that confidence is unlikely to bounce back to levels seen at the start of 2018.