Consumer confidence in the 17 countries that share the euro improved in the latest survey despite ongoing sovereign debt concerns, high unemployment, and mounting inflationary pressure and , according to The Wall Street Journal. On Friday, the European Commission issued a flash estimate of its consumer confidence indicator that showed the eurozone index rose to -9.7 in May from -11.6 the previous month, defying economists’ expectations for sentiment to worsen to -12 this month. The report also showed that consumer confidence in the entire European Union rose to -10.6 from -13.9 in April.
The uptick in consumer confidence came even as Greece, Ireland, and Portugal continue to struggle with sovereign debt woes. Additionally, the European Central Bank is likely mulling an increase in interest rates in the coming months as inflation in the region continues to rise on surging energy prices. Howard Archer of IHS Global Insight said, “The problem is that higher consumer confidence in the eurozone does not necessarily generate higher spending.” The unemployment rate also remains high at 9.9%, which continues to weigh on consumers’ outlook for the European economic recovery.