Global| Dec 23 2013Consumer Confidence Hits the Skids in Italy
Summary
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. [...]
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.
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.
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