ECB Survey Shows Mixed Consumer Expectations for October

The European Central Bank (ECB) released the results of the October 2024 Consumer Expectations Survey on Friday, revealing a nuanced picture of consumer sentiment across the Eurozone. The survey showed that consumers’ median inflation perception for the past year decreased from 3.4% in September to 3.2%. This marks a significant drop from the peak level of 8.4% in September 2023. However, inflation expectations for the upcoming year saw a slight increase from 2.4% to 2.5%. Expectations for inflation three years ahead remained stable at 2.1%, the lowest level since the start of the Russia-Ukraine conflict in February 2022.

In terms of income and consumption, the survey indicated that consumers’ expectations for nominal income growth fell from 1.3% in September to 1.1%. Despite the decrease in the perception of nominal spending increase for the past year, expectations for spending growth next year rose from 3.2% to 3.3%. Economic growth expectations for the next year worsened, with consumers forecasting a growth rate of -1.1% compared to -0.9% in September. On a more positive note, the expected unemployment rate for the upcoming year showed a slight decrease from 10.6% to 10.4%.

Housing market expectations remained relatively stable, with consumers anticipating a 2.8% increase in housing prices next year, consistent with the previous month’s expectations. Expectations for mortgage interest rates decreased to 4.6%, the lowest level since August 2022, representing a decline from the peak in November 2023. The survey also highlighted differences between income brackets, indicating that low-income households expected higher mortgage rates compared to high-income households.

The ECB also announced the forthcoming release of additional microdata obtained from a two-year thematic module, which will enhance research possibilities with the Consumer Expectations Survey data. These modules encompass consumer financing and housing situations, with plans for more modules related to labor market experiences and central bank topics to be published in 2025. The next CES results are scheduled to be released on January 7, 2025.