Lower-income euro-area consumers expect higher unemployment and mortgage rates than wealthier peers, while households overall grew more pessimistic on growth and raised their near-term inflation outlook, the European Central Bank said Friday.
Respondents in the lowest-income fifth put the unemployment rate a year ahead at 13.6% and mortgage rates at 5.7%. For the highest-income fifth, the estimates were 9.7% and 4.4%. The lower-income group also reported higher inflation perceptions and expectations. The ECB said differences between income groups in expectations for income growth, unemployment and mortgage rates had appeared in earlier months, too.
Median inflation expectations for the next 12 months rose to 3.1% in September from 3.0% in August. The three-year measure stayed at 2.9%, and the five-year measure remained at 2.5%. The median estimate of inflation over the previous 12 months increased to 3.6% from 3.5%.
Consumers' outlook for economic growth over the next year worsened to -1.5% from -1.2%, and their expected unemployment rate climbed to 11.3% from 11.0%. Respondents' perceived current unemployment rate was 10.6%. Expected nominal income growth rose to 1.1% from 1.0%, while expected spending growth increased to 3.7% from 3.6%. Consumers expected the price of their own homes to rise 3.5% over the next year, up from 3.4% in August. The mortgage-rate expectation for that period was 4.9%, unchanged from July.
The survey came as Eurostat recorded annual euro-area inflation of 3.8% in September, up from 3.2% in August; energy contributed 1.71 percentage points. That recorded rate differs from consumers' perceptions and expectations.
The ECB reported a slight increase in uncertainty around the one-year inflation outlook, which remained above its pre-conflict level. Fieldwork ran from Aug. 27 to Sept. 28 and included around 19,000 adults in 11 euro-area countries. The bank uses 2% winsorized means for its statistics unless otherwise indicated; its inflation perception and expectation figures are medians. The results inform policy analysis but do not represent the views of the ECB's decision-making bodies or staff. October survey results are scheduled for Nov. 27.
