Now Back in September I said this:
Italian consumers appear to be feeling good. This is welcome news, but as an economist I have to ask myself whether this feelgood effect is sustainable.
And as I would also say, you shouldn't read too much into consumer confidence indexes which are known to be highly volatile, so I won't (in this sense the investor sentiment indexes are much more revealing). All I would say is that Italian consumer confidence isn't holding where it was, and this does seem to be coherent with the underlying fundamentals.
Now Paris often suggests I offer a one sided reading of things, so I would be interested to hear anything that anyone else may have to say.
I would just point out that both Claus Vistesen and I have been arguing for some time now that the Eurozone is slowing, and that there isn't going to be a Goldilocks recovery, and that the ECB is seriously out of touch with reality on this point. No doubt at some stage they too will correct.
Figures on French consumer spending out today simply fill in a few more details in the picture.
Italian consumer confidence fell in October from a four-year high on concern that higher taxes included in the government's budget plan and rising interest rates will leave households with less to spend.
The Rome-based Isae Institute's index, based on a poll of 2,000 households, dropped to 108.6 in September, from a 4-year- high of 110.1 in August. The reading was lower than the 109.8 median forecast of 19 economists surveyed by Bloomberg News.
``The uncertainty surrounding the 2007 budget, and the perception that the government is raising taxes likely had an impact,'' Matteo Radaelli an economist at Rasbank SpA in Milan said. ``Higher interest rates, which make mortgage payments more of a burden, may also have affected confidence.''
The drop in Italian confidence reflected growing pessimism in Europe. French consumer spending on manufactured goods declined the most in 10 years in September, a government report said today. German investor confidence fell to the lowest in 13 years in October, an Oct. 17 report by the ZEW Center for European Economic Research showed.
Italians were more pessimistic about the prospects for growth with the index on the outlook for the economy falling to 97.0 from 100.1, Isae said. Perception of personal wealth was also negative with the index declining to 113.0 from 115.6, the lowest in six months.
Italy Economy Real Time Data Charts
Edward Hugh is only able to update this blog from time to time, but he does run a lively Twitter account with plenty of Italy related comment. He also maintains a collection of constantly updated Italy economy charts together with short text updates on a Storify dedicated page Italy - Lost in Stagnation?