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30-10-2014, 10:23 PM
Eurozone confidence revives in October
OCTOBER 30, 2014 9:15PM
Businesses and consumers across the 18 countries that share the euro became slightly more upbeat about their prospects during October, a fresh sign that the currency area's economy is unlikely to slide back into contraction.
The pick-up in confidence follows surveys of purchasing managers released last week that recorded a slight acceleration in the growth of activity, while figures also released Thursday showed a surprising fall in the number of Germans without work.
A run of poor data from the eurozone published in the first half of this month and largely covering August and September had fuelled concerns the currency area's anemic recovery had ended, threatening a slide into a period of deflation.
But more recent surveys and data releases suggest that grim fate has likely been avoided for now, even if the economy may have contracted modestly in the third quarter.
The European Commission on Thursday said its Economic Sentiment Indicator -- a measure of consumer and business confidence -- rose to 100.7 in October from 99.9 in September. Economists had expected a decline to 99.7.
The pick-up in confidence suggests households and businesses may raise their spending in coming months. It was spread across all business sectors, including industry and services, and across many of the eurozone's largest national economies, including Germany, France, Italy and the Netherlands.
The near stagnation of the eurozone economy in the second quarter was a key factor in persuading the European Central Bank to announce a fresh package of stimulus measures on September 4, including cutting the bank's key interest rates and announcing two bond-buying programs.
The second wave of stimulus measures in four months was intended to stave off widespread and self-reinforcing declines in consumer prices. The commission's survey carried a rare piece of encouraging news for policy makers, with most businesses reporting that they expected the prices they charge to be higher in coming months than they had expected in September, while consumers' inflation expectations also picked up.
Separately, figures from Spain showed consumer prices fell less sharply in the 12 months to October than in the 12 months to September. The country's National Statistics Institute also reported that the eurozone's fourth-largest national economy grew 0.5 per cent in the three months to September from the second quarter, a modest slowdown from the 0.6 per cent rate of growth recorded in the three months to June.
OCTOBER 30, 2014 9:15PM
Businesses and consumers across the 18 countries that share the euro became slightly more upbeat about their prospects during October, a fresh sign that the currency area's economy is unlikely to slide back into contraction.
The pick-up in confidence follows surveys of purchasing managers released last week that recorded a slight acceleration in the growth of activity, while figures also released Thursday showed a surprising fall in the number of Germans without work.
A run of poor data from the eurozone published in the first half of this month and largely covering August and September had fuelled concerns the currency area's anemic recovery had ended, threatening a slide into a period of deflation.
But more recent surveys and data releases suggest that grim fate has likely been avoided for now, even if the economy may have contracted modestly in the third quarter.
The European Commission on Thursday said its Economic Sentiment Indicator -- a measure of consumer and business confidence -- rose to 100.7 in October from 99.9 in September. Economists had expected a decline to 99.7.
The pick-up in confidence suggests households and businesses may raise their spending in coming months. It was spread across all business sectors, including industry and services, and across many of the eurozone's largest national economies, including Germany, France, Italy and the Netherlands.
The near stagnation of the eurozone economy in the second quarter was a key factor in persuading the European Central Bank to announce a fresh package of stimulus measures on September 4, including cutting the bank's key interest rates and announcing two bond-buying programs.
The second wave of stimulus measures in four months was intended to stave off widespread and self-reinforcing declines in consumer prices. The commission's survey carried a rare piece of encouraging news for policy makers, with most businesses reporting that they expected the prices they charge to be higher in coming months than they had expected in September, while consumers' inflation expectations also picked up.
Separately, figures from Spain showed consumer prices fell less sharply in the 12 months to October than in the 12 months to September. The country's National Statistics Institute also reported that the eurozone's fourth-largest national economy grew 0.5 per cent in the three months to September from the second quarter, a modest slowdown from the 0.6 per cent rate of growth recorded in the three months to June.