EMU: EC Consumer Confidence Flash

Highlights

Euro-area consumer confidence improved modestly in August 2026, with the indicator rising by 0.4 points from minus 15.9 to minus 15.5. The outcome was also stronger than the market consensus of minus 16.5. This positive surprise suggests that household sentiment was more resilient than analysts anticipated. Nevertheless, the index remained negative and below its long-term average, indicating that pessimistic households continued to outnumber optimistic ones.

The improvement should be seen as a moderation of consumer anxiety rather than a decisive restoration of confidence. Persistent concerns surrounding living costs, geopolitical uncertainty, employment prospects and household finances may continue to encourage precautionary saving and restrain discretionary expenditure. The marginal rise could support household consumption if accompanied by easing inflation, stronger real wages and improved labour-market conditions. However, one month’s movement is insufficient to establish a sustained recovery.

In essence, the August reading provides a cautiously positive signal for consumer confidence, but stronger and persistent gains will be required before consumer confidence becomes a reliable driver of euro-area economic growth. These updates take the RPI to 8 and the RPI-P to 16, meaning that economic activities based on the RPI continue to align with market expectations in the euro area.

Market Consensus Before Announcement

A weaker reading at minus 16.5 is the call versus the prior minus 15.9.

Definition

Compiled by the European Commission, the flash consumer confidence index is a broad measure of consumer sentiment. It is based on monthly surveys of consumers from all the European Union countries. The survey probes into consumers' perceptions towards their past and expected future financial conditions, as well as their feel of the economy overall. This includes topics such as major purchase intentions for the next year, savings intentions, home improvements, purchase of a car, prices and unemployment, among others. This flash measure is based on only partial data and provides an early guide to the final index, published around a week later as part of the full Economic Sentiment survey.

Description

The pattern in consumer attitudes can be a major influence on stock and bond markets. Consumer spending drives the lion’s share of the economy, and if the consumer is not confident, she will not be willing to pull out the big bucks. This Consumer Confidence survey offers key confidence data across the European Union and the European Monetary Union. Consumer confidence impacts consumer spending which affects economic growth. 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.

Since consumer spending accounts for such a large portion of the economy, the markets are always eager 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. The index is a broad measure of consumer confidence in the EU members and because of its coverage of all the EU countries it is highly regarded in the financial markets as a good indicator of the mood of consumers in each country. It is also normally a good indicator of quarterly GDP.

Data are available for each country and are aggregated for both the EMU and EU. The data are seasonally adjusted and defined as the difference (in percentage points of total answers) between positive and negative answers. The survey is conducted by the European Commission rather than Eurostat, the compiler of most other EMU data and measures consumer confidence on a scale of -100 to 100, with -100 indicating extreme lack of confidence, 100 indicating full confidence and 0 indicating a neutral opinion. The long-term average of the series is around -14.

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