Aline Schuiling, the senior economist at ABN AMRO, points out that the details of the European Commission’s consumer sentiment survey showed that expectations about the labour market have deteriorated noticeably since the middle of this year.

• “Consumers’ assessment about unemployment during the next twelve months (balance of percentage reporting increase and percentage reporting fall) has risen by more than ten percentage points between May and October (to 15.9 from 5.7). This suggests that the decline in overall consumer sentiment (to -7.6 from -6.5) during that period was largely driven by the deteriorating outlook for the labour market and the resulting decline in job security.
• When looking at past changes in the consumers’ assessment of the outlook for unemployment and the actual unemployment rate, it turns out that changes in sentiment about the labour market are a good leading indicator for changes in the unemployment rate, with a lead of six months to one year.
• Other indicators such as a drop in temporary employment also point in the direction of a sharp deterioration in labour market prospects and rising unemployment over the next year.”