European consumers became more optimistic about their prospects in November, shrugging off the uncertainties created by the election of Donald Trump as the next U.S. president and the prospect of political turbulence across their own continent.
The European Commission on Tuesday said its measure of consumer confidence across the 19 countries that use the euro jumped from minus 8.0 in October to minus 6.1, its highest level since December 2015. The scale of the improvement was a surprise, since economists surveyed by The Wall Street Journal last week had expected a rise to minus 7.8.
Strengthening consumer confidence supports other recent signs that the currency area's recovery is gathering momentum as 2016 draws to a close, while set to remain modest. Some economists worry that rising political uncertainty around the continent and the world could make consumers more cautious about spending, but the commission's survey suggest those concerns are unwarranted for now.
Across the 28-member European Union, the confidence measure rose less sharply, to minus 5.8 from minus 6.5, reaching its highest level since June, when Britons voted to leave the bloc.
The bulk of responses to the commission's regular sentiment survey are received during the first 15 days of the month, so November's reading reflects the initial response to Mr. Trump's victory in the Nov. 8 election.
Mr. Trump's election has raised questions about whether the U.S. will continue to extend the unconditional security guarantee that has underpinned European prosperity since World War II. It also highlighted the possibility that antiestablishment views could receive increased support in a seriesof coming votes across the eurozone.
France, Germany and the Netherlands will hold elections in 2017, with French President Franç ois Hollande and German Chancellor Angela Merkel under pressure from freshly energized populist parties, as well as more traditional rivals.
More immediately, Italian Prime Minister Matteo Renzi has pledged to resign if voters reject key constitutional changes that aim to slim down the country's legislature and speed up lawmaking in a Dec. 4 referendum.
During his election campaign, Mr. Trump suggested military support from the U.S. could be contingent on what its allies in the North Atlantic Treaty Organization spend on defense. He also pledged to introduce new, higher tariffs on imports from China and Mexico, and reassess other trade relationships that he said placed U.S. workers at a disadvantage. Although Europe doesn't appear to be at the forefront of his concerns, European leaders worry about the possible impact on global economic growth of new trade spats between large nations.
For now, however, the commission's survey suggests European consumers are untroubled by events across the Atlantic, or are reserving their judgment until the new president takes office and begins to set policy.
(END) Dow Jones Newswires
November 22, 2016 11:35 ET (16:35 GMT)
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