Eurozone consumer morale increased more than expected in September, according to a flash estimate by the European Commission.
The European Commission said consumer sentiment in the 19 countries sharing the euro currency increased to -1.2 from -1.5 in August. It hit its highest level since April 2001, two years after the euro was launched. Analysts expected the indicator to remain flat from its August reading.
The improvement in confidence implies that consumers will continue to spend freely, providing support to an economic recovery that has been strong in the year to date. The increase in morale also likely follows the stable decline in the jobless rate and the first hints of an acceleration in wages.
Recent figures revealed that pay during the three months through June was two percent higher than in the same period in 2016, the biggest increase since the first quarter of 2015 and higher from 1.3 percent in the earlier three-month period. In the European Union as a whole, consumer sentiment rose 0.8 points to -1.5 in September.
The Organization for Economic Cooperation and Development increased its growth forecasts for the eurozone economy, and currently sees output to rise 2.1% in 2017 and 1.9% in 2018, having earlier projected expansions of 1.8% in each year.