Recent Updates
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Economy in Brief
U.S. Initial Unemployment Insurance Claims Rise Just 9,000
Initial claims for unemployment insurance rose modestly by 9,000 to 745,000 in the week ended February 27...
U.S. Productivity's Decline Lessened in Q4'20; Reverses Q3 Increase
Revisions to nonfarm business sector productivity indicated a 4.2% decline during Q4'20...
EMU Unemployment Rate Steadies in January
The overall EMU unemployment rate was steady in January, off peak, but still elevated...
U.S. ADP Nonfarm Private Payroll Increase Disappoints in February
Job market strength moderated last month....
U.S. ISM Services Index Weakens in February
The ISM Composite Index of Services Activity declined to 55.3 during February...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Carol Stone May 26, 2005
Consumers in Sweden have been less optimistic over the past couple of months than earlier this year, according to the consumer confidence survey conducted by the National Institute of Economic Research (NIER) in Stockholm. The resulting consumer confidence indicator ("CCI") was 5.9 in May and 6.5 in April after averaging 11.5 in Q1 2005. These are "balance" indicators, the net of "better" less "worse" responses.
The confidence survey consists of two kinds of questions, "macro" questions about the current and expected state of the Swedish economy generally and expectations about unemployment, and "micro" questions about the condition of personal finances now and expected and the willingness to make durable goods purchases. These two segments are telling very different stories. The Macro index has been negative almost continuously since early 2001, indicating a lack of confidence in the overall Swedish outlook. But people seem comfortable with their own situations, so that the Micro index has remained in a tight range averaging 12.5 over the last 15 months.
Notably, the Micro index correlates fairly well with Sweden's retail trade. Also reported today, the retail trade index from Statistics Sweden fell in April by 2.8%, but that followed a 2.2% gain in March. These sales, valued in real terms in fixed 2000 prices, are up 4.0% on a year ago. This is a bit slower than the last three years, but the store types with the less vigorous performance have been in the consumer staples area: food and personal products. The more cyclically sensitive durable goods are showing some strength, along with "household products". It is seen in the second graph that durable goods sales have a high correlation with that CCI Micro Index, 73% over the last 13 years.
So the bifurcation of the confidence data is puzzling -- how could people be worried about an unfavorable unemployment picture in the year ahead, while being fairly comfortable with their own finances? At the same time, their relative comfort with what they experience for their own financial well-being is reflected in actions they take, that is in growing purchases of durable and household goods.
Sweden | May 2005 | Apr 2005 | Mar 2005 | Year Ago | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|---|
Consumer Confidence Indicator | 5.9 | 6.5 | 10.7 | 4.9 | 8.7 | 0.9 | 7.2 |
Macro Index | -19.0 | -14.5 | -12.0 | -18.1 | -12.6 | -22.7 | -7.3 |
Micro Index | 13.0 | 11.7 | 13.8 | 11.3 | 12.1 | 8.8 | 10.1 |
Retail Trade (2000=100) | -- | 120.9 | 124.4 | 116.1 | 117.9 | 112.4 | 107.6 |
% Change | -- | -2.8 | 2.2 | 4.0 | 4.8 | 4.5 | 4.6 |