Our Privacy Statment & Cookie Policy

All LSEG websites use cookies to improve your online experience. They were placed on your computer when you launched this website. You can change your cookie settings through your browser.

February 25, 2019

Chart of the Week: Slipping sentiment signals growth moderation, not recession

by Fathom Consulting.

Ever since the wedge between soft and hard data opened in 2017, Fathom posited that this could prove to be a false signal and argued that this gap was more likely to close as a result of weaker sentiment, rather than stronger growth. Since then, sentiment has fallen substantially — Fathom’s euro area Economic Sentiment Indicator (ESI) fell from 1.3% in January 2018 to 0.4% in December of that year. However, growth in 2018 also slowed and the gap between soft and hard data consequently narrowed less than expected. The aggregate ESI stabilised at 0.4% in January and continues to outperform GDP in most member states. Fathom sees lower growth as reflecting a return to mean rather than a slide towards recession, with the expansion continuing broadly at its current pace of 0.2%, with loose policy offsetting headwinds from political uncertainty, weak external demand and disruption in the auto industry.

Refresh the chart in your browser Edit chart in Datastream

Datastream

Financial time series database which allows you to identify and examine trends, generate and test ideas and develop view points on the market.

Refinitiv offers the world’s most comprehensive historical database for numerical macroeconomic and cross-asset financial data which started in the 1950s and has grown into an indispensable resource for financial professionals. Find out more.

 

Get In Touch

Subscribe

We have updated our Privacy Statement. Before you continue, please read our new Privacy Statement and familiarize yourself with the terms.x