ZURICH (MaceNews) – Economic sentiment in the countries sharing the euro increased by a record amount in June, extending the turnaround which started in May, with employment expectations also increasing, the European Commission reported Monday.
Economic sentiment improved to 75.7 in the euro area, rising 8.2 points, which is the largest monthly increase on record, recovering about 30% since the readings in March and April. More encouragingly, the increase was more broad-based in June that it was in May, with “significant increases” across all surveyed business sectors, with the largest gains in the retail sector.
The largest economies in the euro area also saw sentiment increase by the biggest amounts with France up 9.4 points to a reading of 77.1. The Netherlands registered an 8.3-point gain, with Italy and Spain up 8.2 points, followed by Germany which gained 6.6 points to 81.9 from 75.3.
Employment expectations also rebounded, rising to 82.8 in June from 70.1 the previous month.
Consumer confidence improved again in June, continuing the recovery registered in May as “improved expectations in respect of their financial situation, their intentions to make major purchases and, particularly, the general economic situation,” the report said.
Despite the improvements, however, all components of the Economic Sentiment Index remain in negative territory with the European Central Bank underscoring the situation in its Economic Bulletin released June 18.
“Severe job and income losses and exceptionally elevated uncertainty about the economic outlook have led to a significant fall in consumer spending and investment,” the ECB said. “While survey data and real-time indicators for economic activity have shown some signs of a bottoming-out alongside the gradual easing of the containment measures, the improvement has so far been tepid compared with the speed at which the indicators plummeted in the preceding two months.” For the broader European Union, the dynamic was similar with overall economic sentiment improving to 74.8 in June from 66.7 and employment expectations rising to 82.7 from 70.8.
July business and consumer sentiment will be released Friday, August 28 at 11:00am Central European Time.