The euro-zone economy contracted at a steeper pace in July, with consumer and business confidence weakening as the fiscal and banking crises continued to deepen, according to a measure of activity compiled by the Centre for Economic Policy Research and the Bank of Italy.
A monthly survey also released Friday showed French consumer confidence declined in July, while the unemployment rate in Spain continued to rise in the second quarter, hitting 24.63%.
The CEPR and the Bank of Italy Friday said their Eurocoin indicator —which is intended to estimate quarter-on-quarter growth in gross domestic product, excluding erratic components, such as seasonal variations and short-run volatility—fell to -0.24% in July from -0.17% in June, its lowest level since July 2009.
The CEPR and the Bank of Italy attributed the deterioration mainly to the negative surveys of businesses and households.
Surveys released Wednesday showed business confidence declined in Germany and the Netherlands during July, although business confidence improved in Belgium and consumer confidence picked up in Italy.
Statistics bureau Insee Friday said its measure of French consumer confidence fell to 87 in July from 89 in June. Consumers' optimism about their future living standards tumbled 13 points to minus 47. Such a fall hasn't been seen since November 2007.
Unemployment expectations continued to rise sharply, Insee said, up eight points in July to 75 after a 14-point rise in June.
In Spain, the recession led to further job losses, albeit at a slower pace than in previous quarters. The euro zone's fourth-largest economy is suffering from the collapse of a decadelong housing bubble and from deep spending cuts as the government tries to close a towering budget gap. Its unemployment rate is the highest in the currency area.
The Eurocoin indicator pointed to a contraction in the euro-zone economy in each of the three months of the second quarter. But it also indicated a contraction in each month of the first quarter, and official data from the European Union's statistics office later showed that while the economy didn't expand, neither did it contract.
Official figures for the second quarter will be released on Aug. 14, but most economists believe the economy contracted in the three months to the end of June. The July Eurocoin reading indicates that the contraction deepened at the start of the third quarter, setting the currency area on course for recession.
The Eurocoin is one of the earliest measures of growth in the currency area and is consistent with surveys of purchasing managers in manufacturing and services, which also pointed to a contraction in July.
There are few signs of a recovery in the months ahead. Also released Friday, the Conference Board's leading indicator for the currency area, a predictor of future economic activity, fell to 104.8 from 105.1 in June. It was the third straight month of decline for the measure, which aggregates seven other indicators that have a good track record of signaling changes in the economy, including share prices and residential building permits.
"The leading indicators are consistent with a picture of very slow growth or even economic contraction for the remainder of the year, with risks tilted to the downside given the high level of uncertainty about the resolution to the current financial crisis," said Jean-Claude Manini, the Conference Board's senior economist for Europe.
Evidence that the euro-zone economy is contracting in the third quarter may persuade the European Central Bank's governing council to cut its main interest rate when it next meets Aug. 2.
http://online.wsj.com/article/SB10000872396390443343704577552324035445902.html
A monthly survey also released Friday showed French consumer confidence declined in July, while the unemployment rate in Spain continued to rise in the second quarter, hitting 24.63%.
The CEPR and the Bank of Italy Friday said their Eurocoin indicator —which is intended to estimate quarter-on-quarter growth in gross domestic product, excluding erratic components, such as seasonal variations and short-run volatility—fell to -0.24% in July from -0.17% in June, its lowest level since July 2009.
The CEPR and the Bank of Italy attributed the deterioration mainly to the negative surveys of businesses and households.
Surveys released Wednesday showed business confidence declined in Germany and the Netherlands during July, although business confidence improved in Belgium and consumer confidence picked up in Italy.
Statistics bureau Insee Friday said its measure of French consumer confidence fell to 87 in July from 89 in June. Consumers' optimism about their future living standards tumbled 13 points to minus 47. Such a fall hasn't been seen since November 2007.
Unemployment expectations continued to rise sharply, Insee said, up eight points in July to 75 after a 14-point rise in June.
In Spain, the recession led to further job losses, albeit at a slower pace than in previous quarters. The euro zone's fourth-largest economy is suffering from the collapse of a decadelong housing bubble and from deep spending cuts as the government tries to close a towering budget gap. Its unemployment rate is the highest in the currency area.
The Eurocoin indicator pointed to a contraction in the euro-zone economy in each of the three months of the second quarter. But it also indicated a contraction in each month of the first quarter, and official data from the European Union's statistics office later showed that while the economy didn't expand, neither did it contract.
Official figures for the second quarter will be released on Aug. 14, but most economists believe the economy contracted in the three months to the end of June. The July Eurocoin reading indicates that the contraction deepened at the start of the third quarter, setting the currency area on course for recession.
The Eurocoin is one of the earliest measures of growth in the currency area and is consistent with surveys of purchasing managers in manufacturing and services, which also pointed to a contraction in July.
There are few signs of a recovery in the months ahead. Also released Friday, the Conference Board's leading indicator for the currency area, a predictor of future economic activity, fell to 104.8 from 105.1 in June. It was the third straight month of decline for the measure, which aggregates seven other indicators that have a good track record of signaling changes in the economy, including share prices and residential building permits.
"The leading indicators are consistent with a picture of very slow growth or even economic contraction for the remainder of the year, with risks tilted to the downside given the high level of uncertainty about the resolution to the current financial crisis," said Jean-Claude Manini, the Conference Board's senior economist for Europe.
Evidence that the euro-zone economy is contracting in the third quarter may persuade the European Central Bank's governing council to cut its main interest rate when it next meets Aug. 2.
http://online.wsj.com/article/SB10000872396390443343704577552324035445902.html
No comments:
Post a Comment