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UPDATE 1-Euro zone, EU consumer confidence stable in March

Published 03/22/2010, 12:57 PM
Updated 03/22/2010, 01:08 PM
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(Adds economist comments)

BRUSSELS, March 22 (Reuters) - Consumer confidence stayed largely unchanged in the 16-country euro zone and the broader European Union this month, reinforcing concerns that households will make little contribution to economic growth for now.

The European Commission said on Monday its flash estimate of consumer confidence edged down to -13.8 for the 27-country EU from -13.5 in February, while that for the euro area rose to -17.2 this month from February's -17.4.

Recent data has shown that although the euro zone is recovering from the worst economic crisis since World War Two, it continues to shed jobs, hitting people's spending power and undermining future growth.

"March's euro zone consumer confidence figures confirm that consumer sentiment remains weak by historical standards and that a household spending recovery remains some way off," said Ben May, European economist at Capital Economics.

Hard data for the first quarter of this year has been disappointing and suggests household spending probably stagnated at best in the three-month period, he said.

Tax cuts in Germany will help consumer spending but generally fiscal policy will be increasingly less supportive this year, said Howard Archer, European economist at IHS Global Insight.

"The upside for euro zone consumer confidence and spending is likely to be limited for some time to come by relatively high and still rising unemployment, as well as muted wage growth," Archer said.

For further details, Reuters 3000 Xtra users can click on: http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home (Reporting by Dale Hudson; Editing by Toby Chopra)

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