Household sentiment on the economy deteriorated in the European Central Bank’s (ECB) latest survey of consumers — as perceptions of inflation jumped, and expectations for economic growth, and incomes, turned more negative.
The central bank reported that its latest online monthly survey — which canvassed 19,000 adults between April 2 and May 4 — found that the median rate of perceived inflation over the past 12 months rose to 4.%, up from 3.5% in the previous survey.
The median expectation for inflation in the next 12 months also came in at 4%, and the ECB said that uncertainty about inflation for the coming year was at an “elevated level” — although this was unchanged from the last survey.
Generally, lower-income consumers reported higher perceptions of, and expectations for, inflation than higher-income respondents. And, younger consumers had lower expectations for inflation than older ones, the survey found.
Looking ahead three and five years, inflation expectations came in at 2.9% and 2.4%, respectively — which was largely unchanged from the previous survey.
Alongside the perception of elevated price pressures, the survey also found that economic growth expectations remain negative, with respondents anticipating -2.2% growth over the next 12 months, down slightly from -2.1% in the previous research wave.
At the same time, consumers’ income growth expectations for the next 12 months decreased to 0.8% in the current survey, down from 1.2% in the previous one — and, expected spending growth for the same period increased to 4.3% from 4.1%.
“Quarterly data revealed a mixed labour market sentiment,” the ECB said — with unemployed respondents expressing greater hope that they will find a job in the next three months, while respondents that currently have a job reported a higher expected probability of that they will lose their job in the next three months.