How dark is the night: the consumers’ mood coping with the crisis.Evidences from ISAE Consumer Survey

Since 2008 the global economy, following also the financial crisis, is facing a severe decline in economic activity and the economic estimates concerning the first quarter 2009 are even worse. While in the major industrialized economies Consumers Confidence Indicators (CCI) show common negative trends, in Italy we have observed a different pattern. After a sharp fall beginning in 2007, the CCI (in the Italian definition) is unexpectedly showing some signals of recovery since the end of summer 2008. Specifically, the confidence on the personal condition improved, while the economic picture was considered in deterioration at least till the first quarter of 2009. From another point of view, whereas the expectations on the future are worsening, the evaluation on present conditions are recovering. It seems that the effects of the financial crisis have not influenced Italian consumers yet, as it is documented worldwide. It is worth sorting out this puzzle. The paper tries to explain these trends starting from the role played by the single elements on which the composite indicator of confidence climate is determined. Then the recent price evolution and its influence on the Italian Consumer Confidence dynamics are investigated. Since end of summer 2008, the sharp inflation slowdown together with nominal wages increase, may have contributed to keep confidence from falling. A further tool for explaining recent CCI dynamics could also be represented by a micro-data analysis of opinions of population sub-groups, because some of these could have been more exposed than others to the crisis. Therefore the paper explores reactions of different consumers segments (e.g. by income, professional status, household composition).