Consumers leading moderate recovery

The euro-zone exited its record-long recession in Q2 and recent business surveys suggest that the economy should expand again in the third quarter. An increase in household spending, the first in seven quarters, was an important factor behind Q2’s 0.3% quarterly rise in GDP. And the recent sharp rise in consumer confidence suggests that spending growth is likely to pick up further in the coming quarters. Note, though, that the continued weakness of the labour market is likely to limit the pace of the consumer recovery.