Consumer morale in the eurozone plummeted in June, suggesting soaring inflation across the currency bloc is affecting households’ sentiment and willingness to spend.
The European Commission said on Wednesday that its gauge of consumer confidence in the countries that share the euro currency fell to -23.6 in June from a revised figure of -21.2 in May. Economists had predicted the measure to fall to -20.5.
The reading was the lowest since April 2020 during the coronavirus pandemic, when eurozone consumer sentiment had slumped to -24.4.
Across the entire 27-country EU, consumer confidence fell to -24. Wednesday’s numbers come after eurozone inflation spiked to a record high of 8.1 per cent in May, as Russia’s invasion of Ukraine helped push energy and food prices higher.
Meanwhile, producer prices in Germany rose at a record pace in May, the fastest increase since the data series began in 1949, the country’s statistics office reported on Monday.
According to Destatis, producer prices in Europe’s largest economy surged by 33.6 per cent in May year-on-year or by 1.6 per cent during the previous month. Destatis said that increased energy prices were “mainly responsible” for the jump.
“So far, companies have probably only partially passed on the massive increase in producer prices to end consumers,” Commerzbank economist Ralph Solveen said.
He further commented that the underlying momentum for consumer prices is also likely to remain at least very high, and possibly even increase somewhat.
Finally, according to a report published by the National Association of Realtors (NAR), existing home sales in the US showed another steep drop during May.
Sales fell by 3.4 per cent to a seasonally adjusted annualised rate of 5.41 million units, according to the NAR. April’s sales were revised slightly lower as well. This is the weakest reading since June 2020, which was during the early months of the COVID pandemic.
Despite the fourth consecutive monthly drop in sales and declining affordability, the housing market remains fairly hot, with properties typically staying on the market for a record low 16 days according to the NAR.
This article has been prepared by Bank of Valletta plc for general information only.