Indicator Digest - CMS Forex

Consumer Confidence

Countries measure the mood of their consumers by surveying consumer attitudes regarding present economic conditions each month. Consumer spending usually makes up two-thirds of GDP in a developed economy, and therefore is important to monitor. Consumer confidence also affects stock and bond markets, and can give insight into consumers reactions to any economic shocks. The general method in scoring the confidence level is through household surveys conducted monthly. Some use preliminary estimates which surveys fewer households at the beginning of the month, and a final survey that encompasses a larger sample pool towards the end of the month.

Main Indicator: Consumer Confidence

Most Recent Release

August
29th, 2008

Actual

Forecast

Revised Form

-19

-20

N/A

For August
Provided by: European Commission
Official Release: PDF

See "Economic Sentiment Indicator" for commentary.

Table of Past Data

	11/30	1/7	1/31	2/29	3/31	4/30	5/29	6/27	7/30	8/29

Actual	-8	-9	-12	-12	-12	-12	-15	-17	-20	-19
Forecast	-7	-8	-10	-12	-12	-13	-12	-16	-18	-20
Previous	-6	-8	-9	-12	-12	-12	-12	-15	-17	-20
Revised From	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A

Past Releases

July
30th, 2008

Actual

Forecast

Revised Form

-20

-18

-17

N/A

For July
Provided by: European Commission
Official Release: PDF

Services Confidence: 1, forecast 8, pr. 9 (Jun), 8 (May), 7 (Apr), 9 (Mar),
Industrial Confidence: -8, forecast -7, pr. -5 (Jun), -2 (May), -2 (Apr), -1 (Mar)

See Economic Sentiment Indicator for commentary.

June
27th, 2008

Actual

Forecast

Revised Form

-17

-16

-15

N/A

For June
Provided by: European Commission
Official Release: PDF

Services Confidence: 9, pr. 8 (May), 7 (Apr), 9 (Mar),
Industrial Confidence: -5, pr. -2 (May), -2 (Apr), -1 (Mar)

The Economic Sentiment Indicator (ESI) is a compilation of indexes of various sectors. It fell to 94.9 the lowest since May 2005, pushed down by decreases in the industrial, consumer, retail trade, and construction sectors. Services managed to improve. An increasingly pessimistic European consumer, facing rising inflation for energy and food, will start spending less on other goods, lowering domestic demand just as a high Euro and weakening global growth slows gains in the exports industry. The European economy will be facing periods of stagflation now. The ECB is set to raise rates in order to try and fight off inflation, but that will only add more strain to domestic firms and consumers.

From the Release: " In June, the Economic Sentiment Indicator (ESI) continued to decline in both the EU and the euro area. It fell by 2.5 points in the EU and by 2.7 points in the euro area, to 94.6 and 94.9 respectively. In both regions, the ESI remains below its long-term average.

The sectoral developments in the two areas were broadly similar and were characterised by a fall in all
confidence indicators except for services, which increased slightly. The decline in confidence in the
manufacturing sector was more marked in the euro area than in the EU.

May
29th, 2008

Actual

Forecast

Revised Form

-15

-12

N/A

For May
Provided by: European Commission
Official Release: PDF

Services Confidence: 8, forecast 7, pr. 7 (Apr), 9 (Mar), 10 (Feb)
Industrial Confidence: -2, forecast -2, pr. -2 (Apr), -1 (Mar), 0 (Feb)

See the Economic Sentiment Index for more info.

Consumer confidence declined to -15 for May as high inflation eats into consumers purchasing power, and they are seeing their wage increases erodes away by higher prices for food and energy. Signs of a slowdown in the Euro-zone cannot be countered by the central bank lowering rates as policy makers are cnocerned about inflation remains about the target of 2%. Inflation most likely increases to 3.5% this month from 3.3% in April.

April
30th, 2008

Actual

Forecast

Revised Form

-12

-13

-12

N/A

For April
Provided by: European Commission

Services Confidence: 7, forecast 9, pr. 9 (Mar), pr. 10 (Feb)
Industrial Confidence: -2, forecast -1, pr. 0 (Mar), 0 (Feb)

Consumer confidence stayed steady in the Euro-zone despite falls in other sectors like services and manufacturing. With the ECB remaining firm in their approach to combating inflation, keeping interest rates at six-year high of 4%, the Euro has continued to appreciate, hurting the competitivenesses of European exports. High inflation, as a result of oil rising 76% in the past year, is also catching up to industry and consumers at the retail level. The overall economy is now expected to rise 1.7% compared to 2.6% last year. Confidence among manufacturers across the euro region declined more than economists forecast to -2 from 0 in March, while services sentiment dropped to 7 from 9.

March
31st, 2008

Actual

Forecast

Revised Form

-12

N/A

For March
Provided by: European Commission
Official Release: PDF

Services Confidence: 9, forecast 10, pr. 10
Industrial Confidence: 0, forecast 1, pr. 0

From the Release

On Consumer Confidence:

"In March, consumer confidence remained unchanged in both the EU and the euro area. The indicator has been on a downward path since its peak in May 2007 and currently stands below its long-term average in both areas.

In the Eurozone consumers' expectations regarding the general economic situation and unemployment improved somewhat. Moreover, households' expectations regarding their own financial situation remained unchanged, while their views on savings decreased."

On Services Confidence:

"In both the EU and the euro area, following an upturn in the previous month, the retail confidence indicator remained stable in March. The indicator stands above its long-term average in both areas. In both areas, retailers' views on the expected business situation worsened. Retailers' assessment of the present business situation improved in the EU, while remaining stable in the euro area."

On Industrial Confidence:

"In March, the industrial confidence indicator remained unchanged in both the EU and the euro area. Despite the downward trend observed since mid-2007, the indicator still stands well above its long-term average in both areas. In both the EU and the euro area, industrial managers gave a slightly more optimistic assessment of their order books. While managers' production expectations declined further in the euro area, they remained stable in the EU. Their views regarding the stocks of finished products were unchanged in both regions."

February
29th, 2008

Actual

Forecast

Revised Form

-12

N/A

For February

Services Confidence: 10, forecast 11, pr. 12
Industries Confidence: 0, forecast 1, pr. 1

January
31st, 2008

Actual

Forecast

Revised Form

-12

-10

-9

N/A

For January

January
7th, 2008

Actual

Forecast

Revised Form

-9

-8

N/A

For December

The European Commission released the lowest consumer confidence indicator in almost two years. Inflation pushed by record oil prices and weakened orders dampened consumer's outlook.

November
30th, 2007

Actual

Forecast

Revised Form

-8

-7

-6

N/A

For November.