Confidence and Inflation Are Not Improving in Europe Yet
As Europe and the rest of the globe went into lockdown, the economy dived hard, with all economic indicators declining to levels never seen before. The economy dived hard in March and even deeper in April, while many were hoping for an improvement in May.
Although, the confidence is not improving, considering that countries are just starting to reopen and businesses are not fully operational, with many still remaining closed. Some businesses will be closed forever after the long lockdown. Inflation also continues to decline, as the German report earlier today showed.
Latest data released by Eurostat – 28 May 2020
- May final consumer confidence -18.8 vs -18.8 prelim
- Economic confidence 67.5 points vs 70.6 expected
- April Economic confidence 67.0 points; revised to 64.9
- May Industrial confidence -27.5 points vs -26.5 expected
- April Industrial confidence -30.4 points; revised to -32.5
- May Services confidence -43.6 points vs -27.9 expected
- April Services confidence -35.0 points; revised to -38.6
The revised confidence readings for April were lower and there is a mild bounce in economic confidence, but it is still at rather depressed levels. Meanwhile, services confidence continued to decline and that reflects waning optimism about any quick rebound in the industry.
Latest data released by Destatis – 28 May 2020
- May preliminary CPI YoY +0.6% vs +0.6% expected
- April CPI YoY+0.9%
- CPI MoM -0.1% vs -0.1% expected
- April CPI MoM +0.4%
- HICP YoY +0.5% vs +0.4% expected
- April HICP YoY +0.8%
- HICP MoM 0.0% vs -0.1% expected
- April HICP MoM +0.4%
The drop in headline annual inflation is the most notable thing in the inflation report from Germany. That makes this reading the weakest since September 2016, as waning energy prices largely weigh on price pressures in general this month. As seen with the Saxony report earlier, core inflation should remain largely intact for the most part, so I guess that’s one positive takeaway if you really want to look at it.
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