Financial News: Euro Area Consumers' Inflation Expectations Lowest Since 2

Euro Area Consumers' Inflation Expectations Lowest Since 2021: ECB Survey

(RTTNews) - Eurozone consumers lowered their inflation expectations for the next 12 months and turned less negative regarding the economic outlook, though their unemployment worries remained, results of a monthly survey by the European Central Bank showed Tuesday.

The median rate of expected inflation over the next 12 months fell to 2.9 percent from 3.0 percent in March. The latest rate was the lowest since September 2021.

The ECB, which aims to keep inflation at 2 percent, has signaled an interest rate cut in June. What lies beyond that reduction is marred by the recent data that revealed some stickiness in inflation in certain quarters such as services and wage growth.

This suggest that policymakers are <a href=https://www.rttnews.com/3449999/eurozone-consumer-pessimism-ebbs-wage-growth-damp-hopes-of-ecb-easing-beyond-june-rate-cut.aspx target=_blank >unlikely to consider any easing beyond June</a>, for now.

Expected for inflation in three years' time eased to 2.4 percent from 2.5 percent in March, the survey showed.

The median rate of perceived inflation over the previous 12 months was stable at 5.0 percent. "Younger respondents continued to report lower inflation expectations than older respondents, although there was a convergence of inflation perceptions across age groups," the bank said.

The ECB survey also showed that consumers' income growth expectations for the next 12 months were stable at 1.3 percent and their spending expectations were steady at 3.6 percent. Consumers' <a href=https://www.rttnews.com/3443260/eurozone-exits-recession-in-q1.aspx target=_blank >economic growth</a> expectations for the next 12 months improved to -0.8 percent from -1.1 percent in the previous survey.

Meanwhile, expectations for the unemployment rate 12 months ahead climbed to 10.9 percent from 10.7 percent in March. Consumers continued to expect the future unemployment rate to be only slightly higher than the perceived current unemployment rate of 10.6 percent and that implies a broadly stable labor market, the ECB said.

An increase in worries about losing a job and a decrease in hopes of finding a job in the next three months partly explains why unemployment expectations rose. House price growth expectations for next 12 months rose to 2.6 percent from 2.4 percent in March, the survey showed.

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