Consumer outlook darkens

Data published last week did nothing to alter the picture of a rapidly worsening outlook for domestic spending throughout the euro-zone. Consumer sentiment in the periphery is now only a touch above its record low and while core sentiment is rather higher, it has recently fallen sharply. A key factor behind the deterioration is growing concerns about the health of the labour market. Admittedly, the number of unemployed workers has recently been rising a bit more slowly than a few months ago. But consumers in the core have recently grown much more pessimistic about the outlook for the labour market. This could prompt them to become more cautious and cut back further on non-essential spending.