Perceptions about the general economic climate have declined somewhat this year, but consumers’ assessments of their personal situation – which tend to be more correlated with consumption – have remained steady. There are three considerations that underpin our view that this cycle is resilient.
First, an important force behind employment growth in the euro area is longer-term structural changes, and these are less sensitive to cyclical swings. Over the past five years, employment has increased by 9.5 million people, rising by 2.6 million in Germany, 2.1 million in Spain, 1 million in France and 1 million in Italy.