Eurozone inflation perceptions stay at 3.1% for tenth straight month

The survey showed that the median inflation expectations for the next 12 months were also steady at 2.8 per cent, while expectations for three years ahead stayed at 2.5 per cent and five years ahead at 2.2 per cent, indicating a broadly anchored view of price trends across the euro area, ECB said in a press release.

Lower-income households continued to report slightly higher inflation perceptions and near-term expectations than wealthier groups, a pattern seen since 2023, while younger respondents aged 18 to 34 reported lower inflation expectations than older cohorts. Despite these differences, the overall direction of inflation views remained closely aligned across income and age groups.

On the income and consumption front, consumers’ expectations for nominal income growth over the next 12 months were unchanged at 1.2 per cent. Perceived spending growth over the past year edged up to 5.0 per cent from 4.9 per cent in October but expected spending growth for the coming year eased to 3.4 per cent from 3.5 per cent, signalling some caution in household demand. Respondents in the lower three income quintiles continued to expect marginally faster spending growth than those in the top two quintiles.

The outlook for the wider economy became more downbeat. Expectations for economic growth over the next 12 months fell further into negative territory, slipping to minus 1.3 per cent in November from minus 1.1 per cent a month earlier. At the same time, the expected unemployment rate one year ahead declined slightly to 10.9 per cent from 11 per cent, suggesting a modestly improved labour market view.

Lower-income households remained the most pessimistic about jobs, expecting unemployment to reach 13.4 per cent in 12 months, compared with 9.4 per cent among higher-income groups. Consumers, however, continued to see the future jobless rate only slightly above the perceived current level of 10.4 per cent, pointing to expectations of a broadly stable labour market despite weaker growth prospects.

ALCHEMPro News Desk (SG)