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Economy in Brief

Consumer Confidence Hits the Skids in Italy
by Robert Brusca  December 23, 2013

After a long hard run to higher confidence readings peaking at 100.7 in September 2013, Italy's consumer confidence has been eroding again. Confidence in Italy was last lower in February 2013, but in that month it was also much lower.

The overall situation is assed as a -131 reading which is a historic bottom 10% level. Current conditions are still deemed to be quite bad. However, the 12-month expectation for the current situation is +8 reading, which is an historic 86th percentile standing - that, in contrast, is quite good.

Still, expected unemployment is quite high (higher only 25% of the time historically). And the expected budget situation for households is a bottom 3.4% response- rarely ever worse. Italian consumers judge themselves to be in quite a tight spot.

Their responses concerning their evaluation of their financial conditions are quite weak. The current financial situation has been evaluated as weaker only 6.8% of the time historically, while the forward-looking `next twelve months' is expected to have been worse only 12.6% of the time. It is progress, but not much.

Italy's consumers are bucking the trend to improvement in Europe, a trend that is being led by Germany and followed strongly by the UK. Italy is a reminder that the rest of Europe is not slavishly following the leader. It is not clear if Italy - or other peripheral EMU members- is weaker enough to create a euro-schism, but it might be.

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