European Consumer Confidence Holds Near Nine-Month Low on Cloudy Outlook
European consumer confidence remained near the lowest in nine months in June as rising unemployment and a fiscal crisis clouded the growth outlook.
An index of consumer sentiment in the 16-nation euro region rose to minus 17.3 from minus 17.8 in May, the Brussels-based European Commission said today in an initial estimate. The May reading was the lowest since September 2009. The commission is scheduled to publish its monthly report on economic confidence, which includes the consumer-confidence gauge, on June 29.
European consumers may keep spending plans on hold after unemployment rose to the highest in 12 years in April and inflation accelerated to the fastest pace in more than a year in May. While the economy is showing signs of strengthening, governments have been forced to step up spending cuts to restore investor confidence and counter a European debt crisis.
“We don’t have many positive impulses for consumption at the moment,” said Christoph Weil, a senior economist at Commerzbank AG in Frankfurt. “Households will only start to pick up spending once the labor market recovers.”
Hermes International SCA Chief Executive Officer Patrick Thomas said on June 7 that “many questions remain” about the outlook for 2010. The Paris-based maker of Birkin bags expects revenue to rise at least 5 percent this year, he said.
The European Central Bank on June 10 forecast the euro- region economy to expand about 1 percent this year and around 1.2 percent in 2011. It previously forecast the economy to grow around 0.8 percent this year and 1.5 percent next year.