The European Central Bank (ECB) has shared its latest Consumer Expectations Survey results.
As noted in an update posted by the ECB, when compared with September 2023:
- median consumer inflation expectations for the next 12 months and for three years ahead remained unchanged;
- expectations for nominal income growth over the next 12 months and expectations for nominal spending growth decreased slightly;
- expectations for economic growth over the next 12 months became marginally more negative, while the expected unemployment rate in 12 months’ time remained unchanged;
- expectations for growth in the price of homes over the next 12 months decreased, while
- expectations for mortgage interest rates 12 months ahead remained unchanged.
Inflation
The median rate of perceived inflation “over the previous 12 months decreased to 7.8%, from 8.0% in September. Median expectations for inflation over the next 12 months remained unchanged at 4.0%, and those for inflation three years ahead also remained unchanged, at 2.5%.”
Inflation expectations, particularly “at the three-year horizon, remained well below the perceived past inflation rate. Uncertainty about inflation expectations over the next 12 months remained unchanged.”
The development of inflation perceptions and expectations “remained closely aligned across income groups, although younger respondents (aged 18-34) continued to report lower inflation perceptions and expectations than older respondents (aged 55-70). (Inflation results)”
Income and consumption
Consumers expected their nominal income “over the next 12 months to grow by 1.1%, which was slightly lower than in September (1.2%).”
This decrease was driven “by the expectations of consumers aged 18-34 and 35-54, while the expectations of older consumers (aged 55-70) increased slightly. Perceptions of nominal spending growth over the previous 12 months increased to 6.3%, from 6.2% in September. Expectations for nominal spending growth over the next 12 months decreased to 3.3%, from 3.4% in September.”
This decrease was driven solely “by older respondents (aged 55-70), with expectations for nominal spending growth remaining stable among consumers aged 18-34 and those aged 35-54.”
Labour market and economic growth
Economic growth expectations for “the next 12 months were marginally more negative, standing at ‑1.3%, compared with ‑1.2% in September.”
Expectations for the unemployment rate 12 months “ahead were unchanged at 11.4%.”
However, the perceived unemployment rate “declined to 10.9%, from 11.1% in September. Quarterly data showed that respondents who were unemployed reported an increase in their expected probability of finding a job over the next three months, which rose to 27.7% in October, from 22.9% in July. By contrast, employed respondents reported that the expected probability of job loss over the next three months increased to 8.8% in October, from 8.2% in July.”
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