Key highlights from the survey,
Income expectations advance by 6.6 points to 10.1, contributing to the modest improvement in overall sentiment.
The upward trend in income expectations supported the Willingness to Buy Indicator, which rose by 4 points to -6.9 points, its highest level since March 2022.
However, the Economic Expectations Indicator declined by 1.3 points to 0.7 points amidst concerns about the labor market.
The Willingness to Save Indicator also reflected concerns about the labor market and economic outlook, rising by 1.3 points.
Nuremberg Institute for Market Decisions (NIM) consumer expert Rolf Buerkl commented on the September survey, saying,
“After the severe setback in the previous month, the slight improvement in consumer climate can be interpreted more as a stabilization at a low level. The consumer climate has not improved since June 2024, when it hit -21 points. Therefore, the slight increase cannot be interpreted as the beginning of a noticeable recovery. The consumer sentiment is generally too unstable for that.”
Labor Market and Inflation Influence ECB Rate Path
Key sub-components of the Consumer Climate Indicator sent mixed signals. An upward trend in the Willingness to Save and concerns about the labor market overshadowed higher Income Expectations and the Willingness to Buy. A pullback in consumer spending may dampen demand-driven inflation, raising expectations of a Q4 2024 ECB rate cut.
However, the ECB could reassess sentiment from the October survey before the December interest rate decision. A marked decline in the Willingness to Buy could elevate expectations of a December interest rate cut.
Expert Views on the ECB Rate Path
Pictet Wealth Management Head of Macroeconomic Research Fred Ducrozet commented on sentiment toward the ECB rate path, stating,
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