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Eurozone consumer morale falls in July despite bright economic outlook
From:Xinhua  |  2017-07-21 03:03

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BRUSSELS, July 20 (Xinhua) -- Consumers' confidence across the 19-country Eurozone dropped slightly this month despite bright economic outlook, official data showed Thursday.

The consumer morale in the single currency zone stood at -1.7 in July, unexpectedly lower than the -1.3 in the previous month, highest reading since April 2001, according to the European Commission, the bloc's executive arm.

In the wider 28-country European Union (EU), the index remained broadly flat at -2.3.

Eurozone's reading came in contrast with consensus expectation for a slight rise from June, although recent economic momentum was recorded in the zone as growth accelerated, inflation increased and jobless rate lowered.

Economist argued that July's decline could reflect the fall in equity prices in the region over the past month, warning that the figure has probably peaked.

Despite the fall in July, the index remained at a very high level and suggested that the consumer recovery was continuing apace at the start of the third quarter, said a research of the Capital Economics.

"Looking ahead to the next year or so, we doubt that consumer confidence will rise," said Jessica Hinds, European economist at the Capital Economics.

Admittedly, general economic outlook is bright and the labor market recovery is expected to continue, which should bolster consumer confidence, but with sentiment at such a high level, there is clearly room for consumers to be disappointed, said Hinds.

On past form, the confidence index was consistent with annual household spending growth, said Hinds, adding that with nominal wage growth still slow, households' expectations for their personal finances might deteriorate over the coming months.

"Overall, we continue to expect annual consumer spending growth to ease from 2 percent in 2016 to 1.5 percent this year," Hinds noted.

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