Eurozone Sentiment is at a 3-Year High

Data on Friday, May 28, showed economic sentiment in the eurozone improved more than expected, hitting a three-year high in May, with the biggest increases in the services, retail, and consumer sectors as governments eased pandemic-related restrictions.

The European Commission’s index of economic sentiment rose to 114.5 in May from 110.5 in April, beating expectations in a Reuters poll for an improvement to 112.1. This is the highest level for the index since January 2018.

Optimism in the services sector, which constitutes two-thirds of the Euro-zone economy, was the most optimistic, rising to 11.3 points from 2.2, far higher than expectations for an increase to 7.5.

Sentiment in the retail sector rose to 0.4 from -3.0, as many stores reopened after the lockdown measures.

Consumer sentiment rose to -5.1 from -8.1 in April, in a move well above the long-term average of -11.0.

Sentiment in the manufacturing sector was at an all-time high, and the construction sector was also up.