Drop in unemployment leads to more spending, but confidence falls

A decrease in the unemployment rate in the last quarter of 2015 led to slightly higher spending in November. Consumer confidence dropped by 2 points in January, according to figures released by Statistics Netherlands on Thursday.

In the last quarter of 2015 unemployment dropped by an average of 7 thousand per month. In December 588 thousand people were unemployed, 6.6 percent of the population. The number of working people increased by an average of 3 thousand per month over the last three months.

Benefits agency UWV paid 446 thousand unemployment benefits in December, 1.1 percent more than in December 2014. Increases in unemployment benefits were most prevalent in major retailers, hospitality and education. There were an average of 439 unemployment benefits paid per month in 2015, a decrease of 1.8 percent compared to the 2014 average.

In November consumers spent 0.3 percent more than in November 2014. Consumers spent significantly less on gas due to the milder weather, which resulted the expenditure on miscellaneous goods, which includes gas, being 1.8 percent lower than in November 2014. Consumers also spent less on clothes and shoes and spending on durable goods were slightly lower than a year earlier.

Spending on food and beverages increased by 1 percent. Consumers spent 0.9 percent more on services, such as rent, public transport, restaurants and hairdressers. According to Statistics Netherlands, spending on services accounts for more than half of the total domestic consumer spending in the Netherlands.

Consumer confidence is less positive in January then in December and fell by two points to 4. Statistics Netherlands mainly attributes the deterioration to consumers being less positive about about the economic climate. The Economic climate indicator stood at 11 in January, compared to 15 in December.