Consumer sentiment brightened a bit in June, according to the European Central Bank’s (ECB) latest survey of households.
The central bank’s monthly survey of 19,000 consumers found that expectations for economic growth over the next 12 months are slightly less negative, and inflation expectations have improved a bit too.
Median expectations for inflation edged down by 0.2 percentage points in June to 2.6%, the ECB reported.
As a result, increases in inflation expectations that were recorded in March and April due to rising tariff fears have now reversed over the past two months, the central bank noted.
However, expectations for inflation three and five years down the road remained unchanged at 2.4% and 2.1%, respectively.
Alongside the tempering of inflation concerns, economic growth expectations for the next 12 months were also slightly less negative in the latest survey — with respondents now anticipating -1% growth, up from -1.1% in May and -1.9% in April.
The projected unemployment rate also edged down by 0.1 points to 10.3% in June.
“Consumers continued to expect that the future unemployment rate would be only slightly higher than the perceived current unemployment rate (9.8%), suggesting a broadly stable labour market outlook,” the ECB said.
Alongside the stable employment outlook, consumers continue to expect nominal income growth of 1% over the next 12 months, unchanged from May.
“However, this apparent stability conceals a decline in expectations among higher income individuals, offset by an increase in expectations among lower income groups,” the ECB reported.