Tuesday’s euro chart: quasi-improving consumer sentiment

The euro zone index of consumer sentiment in May confirmed a relative improvement this month, drawing a less negative private consumption this quarter. This would indicate a rate of contraction in both the first and the second quarter of about -0.5% (-0.7% in the fourth quarter). Retail sales data, to be published today, are expected to slowdown its worsening. They would also point to a contraction rate of about -0.5%.

Against this, analysts at BNP Paribas added in an investor report that the poor outcome of unemployment draws a more negative trend. Yet, here too there's a silver line.

“It should b

e noted, however, that the rising unemployment rate supported higher growth rates. In this sense, in the second quarter, a rising unemployment rate of 11.5% would mean a private consumption of 0.3% versus 0.4% drawn for the first quarter. Since this component of GDP has a higher correlation with confidence and/or sales, it is to be expected that private consumption behaves in a less negative way in the first half of the year.”

download4

zp8497586rq

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.