Consumer morale perked up this month in strike-plagued France, hit half-year highs in Italy and stayed buoyant in Europe's growth engine Germany as concerns eased about job prospects in the euro zone's three biggest economies.
Confidence data from the states that together generate more than two-thirds of the single currency area's output boosted hopes its economy will stay resilient through the final quarter of 2010, brushing off the impact of austerity programs and a strong euro as well as lingering sovereign debt concerns.
In France, consumer confidence rose to an eight-month high in October, confounding forecasts for a slight decline as fewer households worried about unemployment and against a backdrop of nationwide protests at pension reforms that have dealt a glancing blow to the country's recovery. Italian morale rose to levels last seen in April, again against expectations of a slight decline.
Consumer morale going into November in Europe's top economy Germany held at its highest level since May 2008, though the figure fell slightly short of economists' expectations, a survey by the Gaff market research group showed.
"In Germany you have consumption which has held up well over the past few months, supported by the strong jobs market," said Matrixes economist Sylvain Brayer.
"In France we are seeing a slight uptick based on the fact that expectations of further deterioration in the job market are beginning to subside."
STRIKE IMPACT SEEN LIMITED
France's national statistics office INSEE's monthly index of consumer confidence in the euro zone's second-largest economy rose to -34 from an unrevised -35 in September. Analysts polled by Reuters had expected a reading of -36.
"In October, (fewer) households ... than in September ... anticipate an increase in unemployment," INSEE said, noting that the index of joblessness concerns dipped to 43 from 45.
French consumers' outlook for their personal finances also improved, rising to -17 from -19 while concerns about inflation rose to -27 from -30. Goldman Sachs economist Natasha Valla said that was "consistent with the scenario of a continued recovery."
France has been hit by a series of oil refinery strikes and fuel depot blockades this month that have squeezed petrol and diesel supplies, as unions protest President Nicolas Sarcoxie’s plan to raise the retirement age by two years.
"Obviously, the climate of social tensions that has unfolded since September does not seem to have fundamentally affected the gradual path of improvement in confidence," Valla said.
French Economy Minister Christine Lagarde has acknowledged the strikes and fuel shortages are hurting businesses, but said on Tuesday she did not expect that to dent the government's 2010 growth forecast of 1.5 percent.
In Italy, research institute ISAE's main confidence index rose to 107.7 in October from 107.2 in September and topped forecasts by analysts polled by Reuters for a reading of 106.8.
"The worst of the economic cycle, also for the job markets, appears to be behind us. This means that also consumer spending, which has been stagnant up until now, should see a gradual pick-up," said Intesa Sanpaolo economist Paolo Mameli.
In Germany, the forward-looking GfK consumer sentiment indicator, based on a survey of 2,000 people, held steady at 4.9 for November, unchanged from October, the Nuremberg-based group said.
The reading undercut a Reuters poll forecast of 5.1 points.
"Consumers' good mood combined with a significant improvement on the labor market will provide for a further stabilization of domestic demand," Rolf Buerkl, a researcher for GfK, said in a statement.
"Consumers still expect that the German economy will continue its recovery."
Recent data from Europe's biggest economy has been mostly bullish, signaling its strong recovery could hold up.
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