Consumers in the 17 countries that share the euro became less gloomy about the economic outlook even as confidence among businesses in the region declined, according to The Wall Street Journal. On Friday, the European Commission reported that its economic sentiment index for the eurozone dropped to 105.5 in May from 106.1 previously, which was a larger decline than economists had expected. The gauge of consumer sentiment added almost two points to reach -9.8 in May, while the indices of confidence in the industrial, services, retail, and construction sectors all declined.
The gain in consumer confidence was linked to an improved economic outlook and strengthening jobs market, although the data suggested that consumers were less likely to make major purchases, which could hold back spending. The drop in the headline sentiment index suggests that the recovery could slow in the coming months. The report said, “The current level of the indicator remains very high, but the drops observed over the last three months may suggest that the acceleration phase of the recovery in industry has come to an end.” Additionally, a separate report showed that the business climate indicator for manufacturing in the eurozone dropped to 0.99 from 1.28 previously.