Wednesday, October 31, 2012

Instant View: Euro zone sentiment eases less than expected in Oct

BRUSSELS (Reuters) - Euro zone economic sentiment fell less than expected in October, data showed on Tuesday, thanks to small improvements in optimism among consumers and in the retail sector, which helped limit the downward pull from industry, services and construction.

LINKS

For Reuters story click on

For European Commission data click on:

http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm

ECONOMISTS' COMMENTS

JENNIFER MCKEOWN, CAPITAL ECONOMICS

"October's deterioration in the euro-zone European Commission business and consumer surveys suggests that the economy started Q4 on a very weak note.

"The fall in the headline Economic Sentiment Indicator, from (an upwardly revised) 85.2 to 84.5, was broadly in line with expectations and left the index at its lowest level since August 2009.

"The decline was driven by falls in service sector and, particularly, industrial sentiment. Consumer sentiment edged up, as had been suggested by the flash estimate. But the index still points to further falls in consumer spending.

"And with unemployment data earlier this morning confirming that even the previously resilient German labor market is now weakening, consumer sentiment is likely to fall again before long.

"In all, the Economic Sentiment Indicator now appears consistent with annual contractions in euro-zone GDP of around 2.5 percent. That implies very steep quarterly falls in GDP in the next few quarters and is consistent with our well below consensus forecast of a 2.5 percent drop in GDP in 2013."

MARKET REACTION

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(Brussels newsroom)

Source: http://news.yahoo.com/instant-view-euro-zone-sentiment-eases-less-expected-102246916--finance.html

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