Euro-area consumer confidence, which is part of a broader economic-sentiment indicator, unexpectedly fell in April for the first time this year.
An index of household sentiment in the 17-nation euro area dropped to minus 19.8 from minus 19.1 in March, the Brussels- based European Commission said in an initial estimate today. That’s the first decline since December. Economists had forecast an improvement to minus 19, the median of 28 estimates in a Bloomberg survey showed.
Surging unemployment rates from Greece to Italy and rising borrowing costs in Spain have fueled concern that the debt crisis is not under control. While European Central Bank President Mario Draghi has said the euro-area economy is showing signs of stabilization “at a low level” after the central bank’s offering of three-year loans, the ECB predicts a contraction in the region this year.
“Unemployment has got further to go before we reach the peak,” said James Ashley, a senior economist at RBC Capital Markets in London. “The crisis does appear to be coming back, but we’re not in the same state that we were in late 2011. All the ECB has done is tackle some of the symptoms; it hasn’t tackled the underlying causes.”
The euro was little changed after the report was published, trading at $1.3127 at 4:02 p.m. in Brussels, up less than 0.1 percent on the day.
The economy of the 17-nation euro area shrank 0.3 percent in the fourth quarter and the ECB predicts an economic contraction of 0.1 percent for this year as a whole. Officials are counting on low interest rates, emergency crisis measures and export demand from outside the region to aid the recovery.
The commission will publish its report on euro-region economic confidence on April 26.
To contact the reporter on this story: Scott Hamilton at firstname.lastname@example.org
To contact the editor responsible for this story: Craig Stirling at email@example.com