Global| May 22 2008Confidence, Still Weak, Makes Sharp Jump
Summary
Italy’s economy continues to be under pressure. Confindustria, the employers association, is looking for GDP to drop in Q2. Prime Minter Berlusconi has offered selected tax cuts to try and stimulate the moribund economy. Retail sales [...]
Italy’s economy continues to be under pressure. Confindustria, the employers association, is looking for GDP to drop in Q2. Prime Minter Berlusconi has offered selected tax cuts to try and stimulate the moribund economy. Retail sales fell sharply in March. Yet, in May consumer confidence rose to highest reading of the year – it was a huge surprise. The assessment of the overall situation in the next 12 months improved very sharply to -9 from -28. The overall situation for the last 12-months improved to -81 from -84 and is still weaker than its -78 reading in January. The prospect of unemployment lessened in May. The environment for savings both current and future assessments improved sharply. The environment for major purchases in the future improved marginally.
The improvement in sentiment is surprising even after looking at the survey. While PM Berlusconi has announced policy moves geared to help spur output, this came after the survey. Italy’s economy is continuing to fade, from the production to the consumption side. . The improvement in consumer sentiment is still a bit of a mystery and it is doubtful that it will be able to extend itself, but that is matter for next month.
| Italy ISAE Consumer Confidence | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Since January 1999 | ||||||||||
| Mar 08 |
Feb 08 |
Jan 08 |
Dec 07 |
%tile | Rank | Max | Min | Range | Mean | |
| Consumer Confidence | 99 | 102.8 | 102.2 | 106.7 | 6.1 | 108 | 127 | 97 | 30 | 111 |
| Last 12 months | ||||||||||
| OVERALL SITUATION | -84 | -76 | -79 | -69 | 0.0 | 111 | -22 | -84 | 62 | -55 |
| PRICE TRENDS | -17.5 | -18 | -23 | -21.5 | 40.8 | 61 | 4 | -32 | 36 | -15 |
| Next 12months | ||||||||||
| OVERALL SITUATION | -35 | -31 | -39 | -35 | 6.3 | 108 | 24 | -39 | 63 | -13 |
| PRICE TRENDS | 23 | 22 | 24.5 | 28 | 38.1 | 55 | 49 | 7 | 42 | 24 |
| UNEMPLOYMENT | 6 | 5 | -2 | 4 | 92.3 | 6 | 9 | -30 | 39 | -5 |
| HOUSEHOLD BUDGET | -2 | -3 | 1 | 9 | 2.8 | 110 | 33 | -3 | 36 | 14 |
| HOUSEHOLD FIN SITUATION | ||||||||||
| Last 12 months | -55 | -53 | -46 | -44 | 0.0 | 111 | -7 | -55 | 48 | -29 |
| Next12 months | -16 | -12 | -14 | -14 | 0.0 | 111 | 14 | -16 | 30 | -1 |
| HOUSEHOLD SAVINGS | ||||||||||
| Current | 54 | 61 | 53 | 60 | 79.1 | 11 | 63 | 20 | 43 | 39 |
| Future | -45 | -42 | -35 | -37 | 0.0 | 111 | -9 | -45 | 36 | -23 |
| MAJOR Purchases | ||||||||||
| Current | -50 | -44 | -42 | -47 | 16.7 | 89 | -15 | -57 | 42 | -40 |
| Future | -65 | -61 | -53 | -61 | 25.8 | 65 | -42 | -73 | 31 | -62 |
| Total number of months: | 111 | |||||||||
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
