Consumer confidence came in at 55.7 in January, up notably from December’s 48.7. January’s result marked the best performance since June 2022.
The uptick was driven by improvements in every subcomponent of the consumer sentiment index. Consumers became more optimistic about the current and future state of the economy and their personal financial situation. They also became more optimistic about the labor market and personal spending ahead.
This more positive outlook was likely connected with an improving outlook for European GDP growth amid better-than-expected natural gas inventories as well as the recent receipt of fiscal benefits such as energy bill credits and the “Christmas bonus” welfare payments.
FocusEconomics Consensus Forecast panelists see private consumption expanding 1.4% in 2023, which is up 0.1 percentage points from last month’s forecast. In 2024, the panel projects private consumption growth at 2.5%.