The European Central Bank (ECB) released the results of its Consumer Expectations Survey (CES) for February 2025, offering a look into how euro area households perceive inflation, economic growth, and their financial prospects.
Conducted monthly across 11 euro area countries with around 19,000 adult participants, the survey provides valuable insights for ECB policymakers as they navigate monetary policy in a dynamic economic landscape.
The February research findings from the ECB, published on March 28, 2025, indicate a mix of stability and subtle shifts in consumer sentiment.
A key takeaway is the steady outlook for inflation.
Median consumer expectations for inflation over the next 12 months remained unchanged at 2.6%, aligning with January’s figure.
Looking further ahead, three-year inflation expectations also held steady at 2.3%.
This consistency suggests that households anticipate inflation stabilizing near the ECB’s 2% target over the medium term, a reassuring signal for policymakers aiming to anchor price stability.
Perceptions of past inflation, however, dipped slightly, with the median estimate for the previous 12 months falling to 3.1% from 3.3% in January—the lowest since January 2022.
This decline reflects a cooling of recent price pressures, though younger respondents (aged 18-34) reported lower perceptions than older groups, highlighting generational differences.
Economic growth expectations painted a more cautious picture.
Consumers projected a -1.2% growth rate for the next 12 months, a slight downturn from January’s -1.1%.
This pessimism, while relatively modest, contrasts with a stable labor market outlook, as the expected unemployment rate edged up to 10.5% from 10.4%, compared to a perceived current rate of 10.0%.
These figures suggest households foresee economic challenges but not a drastic unraveling of employment conditions.
On the financial front, general optimism persisted.
Nominal income growth expectations rose to 1.0% from 0.9%, hinting at confidence in modest wage gains.
Meanwhile, perceived spending growth over the past year eased to 4.9% from 5.1%, indicating a slowdown in expenditure pressures.
Housing expectations remained firm, with home price growth anticipated at 3.0% over the next year, though lower-income households foresaw higher increases (3.5%) than their higher-income counterparts (2.7%).
Access to credit showed slight improvement, particularly for lower-income groups, though overall conditions remained broadly stable.
These findings, while not reflecting ECB policy directly, aim to offer a general pulse on consumer sentiment that could influence future rate decisions.
As the ECB monitors these trends, the survey underscores a euro area populace bracing for tempered growth while holding steady on inflation expectations.