ECB: Consumers’ Expectations of Inflation in One Year Rose in September; in Three Years Unchanged
9 November 2022
By David Barwick – FRANKFURT (Econostream) – The European Central Bank’s consumer expectations survey, released Wednesday for the third time, showed a slight increase in September in expectations of inflation in one year, but no change in the corresponding measure for three years ahead.
‘Perceived inflation over the previous 12 months continued to rise, with the median rate now standing at 8.1%’, up from 8.0% in August and 7.9% in July, the ECB said.
‘Inflation expectations remained well below the perceived past inflation rate, particularly at the medium-term horizon of three years’, it said. ‘Median expectations for inflation over the next 12 months increased from 5.0% to 5.1%, while expectations for inflation three years ahead were unchanged at 3.0%.’
The survey, based on some 14,000 responses from Belgium, Germany, Spain, France, Italy and the Netherlands, also showed overall expectations for nominal income growth 12 months ahead at 0.6% (below both 1.0% in August and 0.8% in July), with the exception of those in the lowest income quintile, who anticipated lower nominal income growth
Expectations of nominal spending growth over the next 12 months were at 4.5%, as in August, after 4.2% in July, the ECB said.
Meanwhile, expectations of economic growth over the next 12 months decreased to -2.4% after -1.7% in August and -1.9% in July, the ECB said.
‘Consistent with the lower expectations for economic growth, expectations for the unemployment rate 12 months ahead rose to 12.2%, from 11.9% in August’ and 12% in July, the ECB said. ‘Consumers continued to expect the unemployment rate to be higher than the perceived current unemployment rate (11.5%).’