Danish wage increases credited for public optimism over economy
A measure for optimism over the economy among consumers in Denmark increased significantly between December and January. Wage increases are now outstripping inflation, an expert noted.
Danish consumers have taken a considerably more optimistic view of the national economic situation, according to a new index released by Statistics Denmark.
The ‘consumer confidence’ indicator, released monthly by the agency, hopped from -13 in December to -8.4 in January.
That is the biggest upwards jump in the metric since April last year and the highest it has been overall since February 2022.
An expert said wage increases, gradually implemented in response to inflation in 2022 and 2023, have now overtaken price increases, giving cause for consumers to feel optimistic.
“Wages have run far, far further than prices, and employment and house prices are both increasing at the same time,” senior economist of Sydbank Søren Kristensen said in a written comment.
“This all makes it easier to be a Danish consumer and this is can be reflected in the consumer confidence that is now close to its highest level in two years,” he added.
Consumer confidence is measured by asking members of the public to rate the condition of their own finances as well as the overall economy compared with a year ago, along with expectations for the coming year.
The negative value of the index is evidence that consumers do not have a purely positive view of the economy, Kristensen said.
“Because, despite the increase in real income, the actual real income is still lower than before. We have actually become poorer,” he said.
The index has had a negative value since October 2021 and reached a low point in October 2022, where it was calculated at -37.
October 2022 was also the month in which inflation peaked in Denmark during the energy crisis of that year, reaching 10.1 percent. It has since declined to under a single percent.
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Danish consumers have taken a considerably more optimistic view of the national economic situation, according to a new index released by Statistics Denmark.
The ‘consumer confidence’ indicator, released monthly by the agency, hopped from -13 in December to -8.4 in January.
That is the biggest upwards jump in the metric since April last year and the highest it has been overall since February 2022.
An expert said wage increases, gradually implemented in response to inflation in 2022 and 2023, have now overtaken price increases, giving cause for consumers to feel optimistic.
“Wages have run far, far further than prices, and employment and house prices are both increasing at the same time,” senior economist of Sydbank Søren Kristensen said in a written comment.
“This all makes it easier to be a Danish consumer and this is can be reflected in the consumer confidence that is now close to its highest level in two years,” he added.
Consumer confidence is measured by asking members of the public to rate the condition of their own finances as well as the overall economy compared with a year ago, along with expectations for the coming year.
The negative value of the index is evidence that consumers do not have a purely positive view of the economy, Kristensen said.
“Because, despite the increase in real income, the actual real income is still lower than before. We have actually become poorer,” he said.
The index has had a negative value since October 2021 and reached a low point in October 2022, where it was calculated at -37.
October 2022 was also the month in which inflation peaked in Denmark during the energy crisis of that year, reaching 10.1 percent. It has since declined to under a single percent.
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