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Spanish Consumer Morale Drops Further In October
04 November 2010 @ 14:07

(RTTNews) - Spanish consumer confidence dropped sharply in October, as households' assessment on current economic situation and expectations deteriorated.

According to survey data released by the Instituto de Crédito Oficial on Wednesday, the consumer confidence indicator logged 67.1, down from 72.8 in September. That was the second consecutive fall in the index.

A breakdown of data showed that a measure of consumers' view on the current situation in the Spanish economy slipped to 44.4 in October from 50.9 in September. The think tank said a downtrend observed in households' view on the Spanish economy, employment situation and households economy in the past six months led to a decline in the current economic indicator.

Moreover, households' economic expectations for the next six months diminished, with the indicator falling to 89.8 from 94.7. Consumers were less optimistic about the Spanish economic developments in the coming months. They were also increasingly pessimistic about future employment and household economic situation.

"Households expressed notably greater pessimism about future economic and employment prospects, with consumers expecting the very fragile economic recovery to falter in the face of looming tough fiscal austerity measures and a renewed rise in unemployment in the latter months of 2010," IHS Global Insight economist Raj Badiani said. "We believe consumer spending will be under significant pressure in late-2010 and most of 2011."

Unemployment in Spain increased for a third month in a row in October, taking the total number of unemployed to 4.09 million, the Labor Ministry said Wednesday. The number of unemployed recorded a 1.7% month-on-month increase from September's 4.02 million. Unemployment increased by 68,213 persons from the previous month, while economists had forecast an increase of 82,800. In September, there was a monthly increase of 1.21% in the number of job seekers.

Compared to October last year, the number of unemployed rose 7.29%, adding 277,623 persons to the unemployed population. The annual growth rate in the previous month was 8.31%.

The Spanish economy expanded at a weaker pace in the second quarter by growing 0.2% following just 0.1% expansion in the first quarter.

Source: RTT News

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