Eurozone growth expectations for next 12 months less negative in Jan

Median expectations for inflation over the next 12 months also decreased to 2.6 per cent from 2.8 per cent.

In both instances, these decreases reversed the increases observed in the December 2024 data.

Median expectations for inflation three years ahead were unchanged at 2.4 per cent in January 2025.

Inflation expectations at the one-year and three-year horizons thus remained below the perceived past inflation rate.

Uncertainty about inflation expectations over the next 12 months remained unchanged, for the sixth month in a row, at its lowest level since February 2022, an ECB release said.

Eurozone consumers’ nominal income growth expectations over the next 12 months decreased to 0.9 per cent in January from 1.1 per cent in December. The drop in income growth expectations was mainly driven by the lowest income quintile, while the income growth expectations of the two highest quintiles remained unchanged.

Perceived nominal spending growth over the previous 12 months decreased to 5.1 per cent in January, from 5.2 per cent in December, while expected nominal spending growth over the next 12 months increased to 3.6 per cent, from 3.5 per cent in December.

Economic growth expectations for the next 12 months were less negative in January, standing at minus 1.1 per cent compared with minus 1.3 per cent in December.

Expectations for the unemployment rate 12 months ahead decreased to 10.4 per cent in January from 10.5 per cent in December.

Consumers continued to expect the future unemployment rate to be only slightly higher than the perceived current unemployment rate (9.9 per cent), implying a broadly stable labour market.

Quarterly data showed that unemployed respondents reported a decrease in their expected probability of finding a job over the next three months, which declined to 25.1 per cent in January from 29.3 per cent in October 2024.

Employed respondents, by contrast, reported that their expected probability of job loss over the next three months decreased to 8.6 per cent in January from 9 per cent in October last year.

ALCHEMPro News Desk (DS)