EUROZONE RECOVERY MAY HAVE LOST MOMENTUM IN Q4: CAPITAL ECONOMICS The recent deterioration of Eurozone consumer confidence, and slowdown in consumption growth indicate that the blocs economic recovery may have lost some momentum in the fourth quarter, Capital Economics economists Paul Hollingsworth and Jonathan Loynes said. According to the firm, a consumer-led economic recovery seems very unlikely, with household spending growth being held back by an extremely weak labor market and continued household deleveraging. Survey data released by the European Commission on Thursday showed that the consumer confidence index fell to -15.4 in November from -14.5 in October, marking the the first drop in a year. Though the index still points to quite a strong pick-up in spending growth in the near term, the recovery of consumption does not seem to be gathering pace. Also, growth in consumer spending remains negative on an annual basis. According to the economists, the weak underlying consumption growth would further weaken inflation, which is already at worryingly low levels. Capital Economics further noted that the slowdown in Eurozone private sector growth in Novermber, as the latest purchasing managers survey showed, also suggests that the regions already anemic economic recovery may be losing more steam. Source: mt5/
Posted on: Fri, 22 Nov 2013 06:06:52 +0000
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