Euro-Area October Economic Confidence Rise Beats ForecastAngeline Benoit
Economic confidence in the euro-area rose more than economists forecast in October, adding to signs the single-currency bloc’s recovery is gaining momentum.
An index of executive and consumer sentiment increased for a sixth month to 97.8 from 96.9 in September, the European Commission in Brussels said today. That exceeded the median estimate of 97.2 in a Bloomberg News survey of 31 economists.
The euro-area economy is in what the European Central Bank says is a “gradual” recovery after exiting a recession in the second quarter. It is struggling with the legacy of the debt crisis, and data tomorrow will probably show that unemployment remained at 12 percent in September, close to a record high.
The data suggest the region’s economy “maintained forward momentum heading into the fourth quarter,” Martin van Vliet, an economist at ING Bank in Amsterdam, said in a note. “At the same time, they are a reminder that a broad-based, sustainable recovery isn’t yet assured.”
Within the index, the gauge of industrial sentiment advanced to minus 4.8 in October from minus 6.6 in September, the commission said. Consumer confidence rose to minus 14.5 from minus 14.9, matching an initial estimate published on Oct. 23. Services confidence weakened to minus 3.7 from minus 3.2.
Sentiment in the financial-services industry, which isn’t factored into the economic confidence number, slipped to 8.6 from 11.3.
European car sales rose the most in more than two years in September, helped by government incentives in Spain, with Renault SA and Daimler AG posting the biggest gains. Carrefour SA, France’s largest retailer, said domestic hypermarket sales rose for the first time in more than two years in the third quarter.
Separate data today showed German unemployment rose for a third month in October, with the number of people out of work climbing a seasonally-adjusted 2,000 to 2.97 million. The adjusted jobless rate was unchanged at 6.9 percent. Even so, Germany’s labor market “remains solid,” said Carsten Brzeski, an economist at ING Bank NV.
ECB President Mario Draghi said on Oct. 2 that the bank will keep key interest rates “at present or lower levels for an extended period,” based in part on the “broad-based weakness” in the economy.
Economists see euro-zone economic growth slowing to 0.2 percent in the third quarter after a 0.3 percent expansion in the three months through June, according to a Bloomberg survey published on Oct. 10. They project a full-year contraction of 0.3 percent.
Spanish gross domestic product rose 0.1 percent in the third quarter, according to a report today, ending a two-year recession. In contrast, the acting head of Italy’s statistics office said yesterday that the Italian economy shrank in the three months through September, prolonging a record slump.
With the euro-region recovery remaining uneven, some companies are continuing to cut jobs. Siemens AG said last month it will eliminate 15,000 posts, with a third of the reduction in the German home market.
Volkswagen AG said today that third-quarter revenue fell 3.8 percent. Chief Financial Officer Hans Dieter Poetsch said the company will focus on “disciplined” cost management because the “economic environment is not expected to improve in the short term.”