Weakness In Sentiment Persists, But Inflation Expectations Fall

The October Economic Tendency Indicator printed at 84.7 in October (slightly lower than an upwardly revised 86.0 in September), but remaining below the 90 handle indicating "much weaker growth than usual".

• The quarterly survey, which includes inflation expectations for firms, showed business expect 2024 inflation at 2.2% (from 2.4% in July) - the lowest since summer 2021. Consumer inflation expectations for the next 12 months once again ticked down to 7.0% (vs 7.1% prior). These expectations peaked at 11.4% in September 2022.
• The standout sub-component was retail trade, which rose 6.1 points to 90.6 (from a revised 84.5), helped by higher sales volume expectations. Other subcomponents fell from September levels, with services continuing its decline to 83.2 (vs 86.0 prior).
• Consumer confidence remained very weak, this month printing at 70.1 (vs 69.4 prior). However, we note that real consumer spending has not seen as large a drop-off as the Tendency Indicator has suggested.
• Actual and expected numbers of employees as well as the labour hording indicators fell in the services sector, while retail trade employment expectations were less negative than in September. Declining employment and hoarding expectations provides some context to the unemployment ticking up to 8.1% in September.
• EURSEK saw a 0.15% spike higher following the release, which has so far been sustained as concerns about the Swedish growth outlook persist. EURSEK remains above all major EMAs following a 4-day streak of upward moves.