| Consensus | Actual | Previous | |
|---|---|---|---|
| Level | -37 | -38 | -38 |
Highlights
Household sentiment was again unchanged in May. At minus 38, the unadjusted headline index matched both its March and April readings but was 2 points higher than a year ago and 3 points stronger than its long-run average. That said, the mid-quarter outturn was slightly weaker than the market consensus.
Most of the components were broadly stable on the month although a jump in the year ahead inflation outlook (104 after 96) to a 4-month high might raise a few eyebrows at the SNB. The increase here contrasted with buying intentions (minus 63 after minus 60) which fell to a 3-month low.
Overall, the results suggest that the previously improving trend in consumer sentiment has run out of steam. However, current levels of the composite index are firm enough to point to modest growth of spending over coming months. Today's update puts the Swiss RPI at minus 7 and the RPI-P at 4. In general, economic activity is performing much as expected.
Most of the components were broadly stable on the month although a jump in the year ahead inflation outlook (104 after 96) to a 4-month high might raise a few eyebrows at the SNB. The increase here contrasted with buying intentions (minus 63 after minus 60) which fell to a 3-month low.
Overall, the results suggest that the previously improving trend in consumer sentiment has run out of steam. However, current levels of the composite index are firm enough to point to modest growth of spending over coming months. Today's update puts the Swiss RPI at minus 7 and the RPI-P at 4. In general, economic activity is performing much as expected.
Market Consensus Before Announcement
Sentiment is again seen little changed at minus 37.
Definition
The State Secretariat for Economic Affairs (SECO) compiles a quarterly survey of consumer attitudes on present and expected economic and financial conditions. The survey covers around 1,200 Swiss households and results are synthesised into a single summary consumer climate index that attempts to measure consumer sentiment.
Description
The pattern in consumer attitudes and spending is often a major influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. Consumer spending accounts for a major portion of the Swiss economy, so investors want to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. An increasing important element of the survey is the question concerning current buying intentions.
