Eurozone: Consumer confidence soars in November - ING

Consumer confidence in the Eurozone rose for the third month in a row in November. According to Bert Colijn, Senior Economist at ING, it adds to optimism about growth in the fourth quarter and helps the outlook for domestic demand ahead of the holiday season.

Key Quotes: 

“Eurozone consumers have good reason to cheer in November. The oil price fell sharply at the start of the month and Eurozone stock prices have gained on the Trump victory. The unemployment rate has been flat over the summer months, but the employment outlook has been improving recently as companies are indicating to be hiring at a faster pace in both services and industry. This seems to have humoured the Eurozone consumer, who had been cautious through the summer months awaiting a negative Brexit response that has turned out to be mild so far.

“The question is whether this momentum can continue to build in the coming months though. While some of the tailwind for the consumer is likely to be maintained, there are also factors that could bring the consumer down to earth. As inflation is likely to continue to increase in the coming months, real wages will probably take a hit before nominal wage growth edges up again. And after a mild response to Brexit and the Trump election, will the Eurozone consumer respond more negatively to political uncertainty within the Eurozone? As a 'no' in the Italian referendum is ahead in the polls for the moment, it could well be that we will soon find out.”