Thursday, September 27, 2012

Data Points to Further Gloom in Euro Zone

New York Times
September 27, 2012

The outlook for the euro zone remained unsettled Thursday, as data showed that confidence among European businesses and consumers continued to fall in September.

The European Commission reported that its economic sentiment indicator for the 17-nation euro zone fell by 1.1 points, to 85.0, the seventh consecutive month of decline. For the broader, 27-member European Union, confidence fell by 0.9 points in September, to 86.1. An indicator above 100 shows more confidence than not about the economy in five sectors surveyed.

The commission attributed the weakening to slipping confidence in four of the sectors: services, retailing, industrial and consumer. The commission pointed to more optimism in the fifth sector, construction, as a promising sign.

The data “serve as another warning that the euro zone economy is sinking further into recession,” Jonathan Loynes, chief European economist at Capital Economics, wrote in a note, adding that it dashed hopes that the European Central Bank’s pledge Sept. 6 “to take more decisive policy action might have improved sentiment towards the broader economy.”


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