Eurozone consumer confidence improves in September

Eurozone consumer confidence improved in September, according to the European Commission on Thursday.

The Economic Sentiment Indictor rose to negative 8.2 in September, in line with expectations, following negative 8.5 in August, the Commission’s preliminary estimate revealed. However, the index remains well below the average of negative 6.9 since the start of 2015.

“Despite September’s slight rise, euro-zone consumer confidence still suggests that household spending growth slowed in the third quarter, “said Daniel Christen, assistant economist at Capital Economics.

“The rise in the indicator may have been driven by an improvement in consumers’ perceptions of the labour market, with unemployment set to continue its steady decline. Nonetheless, the weakness of the index, despite accommodative monetary policy and limited political upheaval from the Brexit vote, suggests the consumer sector remains fragile.”

Looking ahead, the economist expects confidence will remain subdued as recent oil price gains weigh on consumers’ real disposable income growth. Capital Economics predicts eurozone gross domestic product growth to slow from 1.5% in 2016 to 1.0% next year.