The euro-zone economy continued to shrink in October but at a slower pace than in recent months an early gauge of activity showed, while a rise in consumer sentiment in Germany bolstered hopes that the slowdown there will be brief.
Signs of confidence among consumers in Germany, the euro-zone's biggest economy, contrast sharply with a worsening mood in France and Italy, and a rise in joblessness in Spain that means one in four people in the crisis-ridden country is now out of work.
The Centre for Economic Policy Research and the Bank of Italy said their Eurocoin indicator rose to -0.29%, from - 0.32% in September.
The Eurocoin is intended to estimate changes in gross domestic product, excluding erratic components such as seasonal variations and short-run volatility.
It suggests that while economic activity continues to be hit by government spending cuts and pessimism among businesses, some parts of the economy are showing resilience.
"The deeper pessimism recorded by the surveys largely offset the positive contribution arising from recent developments in manufacturing," the CEPR and the Bank of Italy said.
The euro-zone economy contracted at an annualized rate of 0.7% in the second quarter, and the Eurocoin indicator suggests gross domestic product fell again in the three months to September, as well as in October.
The indicator is one of the earliest measures of GDP in the currency area, and is consistent with surveys of purchasing managers in manufacturing and services, which also point to a contraction in October.
No official estimate will be available for economic output between July and September until Nov. 15. However, official data on industrial output, construction output and exports in July and August were stronger than many economists expected, raising the prospect the economy may have avoided a second straight quarter of contraction.
A measure of German consumer confidence Friday rose unexpectedly to its highest level since October 2007, offering hope that Europe's strongest economy--and the source of much of its financial support during the debt crisis--could keep growing on the back of further increases in consumer spending.
The consumer sentiment index from market research group GfK jumped to 6.3 points for November, its highest point in five years, from an upwardly revised 6.1 points in October.
Economists surveyed by Dow Jones Newswires were expecting a lower reading of 5.9. Sub-gauges for economic expectations, income expectations and consumers' willingness to make purchases all rose.
"The increase of the willingness to buy indicates that private consumption should be able to--at least partly--cushion the current slowdown of industrial production," said Carsten Brzeski, economist at ING Bank NV.
"The current optimism is welcome news for the economy." The rise contrasts with a steep fall in business sentiment reported by the Ifo institute, which said confidence in October was at its weakest in three years.
In France, the mood among consumers darkened slightly in October, reflecting the divide that exists between Germany and its less financially robust neighbors.
Although signs are emerging that Germany isn't immune to the sovereign-debt crisis, its economy has continued to grow while France's has stagnated and the economies of Italy, Spain, Greece and several others have shrunk.
French consumer confidence fell in October from September as households became less sure of their financial situation and expected higher unemployment, statistics agency Insee said.
The agency's gauge of sentiment fell to 84 in October from 85 in September. A gauge of business sentiment in Italy unexpectedly fell in October for the first time since June, national statistics institute Istat said Friday.
Confidence in Italy's industrial sector fell to 87.6 in October from 88.3 in September, Istat said. The fall was due mostly to a drop in the outlook for orders in the intermediate-goods sector.
The average forecast of 11 economists polled by Dow Jones Newswires was for an increase to 88.7. Spain's statistics office said Friday the country's jobless rate rose to 25.02% in the third quarter from 24.63% in the second.
The rate is the highest in the euro zone. Spain is suffering from the collapse of a decade-long housing bubble and deep spending cuts as the government tries to cut its annual growth in debt to 6.3% of gross domestic product from well above 9% of GDP last year.
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Signs of confidence among consumers in Germany, the euro-zone's biggest economy, contrast sharply with a worsening mood in France and Italy, and a rise in joblessness in Spain that means one in four people in the crisis-ridden country is now out of work.
The Centre for Economic Policy Research and the Bank of Italy said their Eurocoin indicator rose to -0.29%, from - 0.32% in September.
The Eurocoin is intended to estimate changes in gross domestic product, excluding erratic components such as seasonal variations and short-run volatility.
It suggests that while economic activity continues to be hit by government spending cuts and pessimism among businesses, some parts of the economy are showing resilience.
"The deeper pessimism recorded by the surveys largely offset the positive contribution arising from recent developments in manufacturing," the CEPR and the Bank of Italy said.
The euro-zone economy contracted at an annualized rate of 0.7% in the second quarter, and the Eurocoin indicator suggests gross domestic product fell again in the three months to September, as well as in October.
The indicator is one of the earliest measures of GDP in the currency area, and is consistent with surveys of purchasing managers in manufacturing and services, which also point to a contraction in October.
No official estimate will be available for economic output between July and September until Nov. 15. However, official data on industrial output, construction output and exports in July and August were stronger than many economists expected, raising the prospect the economy may have avoided a second straight quarter of contraction.
A measure of German consumer confidence Friday rose unexpectedly to its highest level since October 2007, offering hope that Europe's strongest economy--and the source of much of its financial support during the debt crisis--could keep growing on the back of further increases in consumer spending.
The consumer sentiment index from market research group GfK jumped to 6.3 points for November, its highest point in five years, from an upwardly revised 6.1 points in October.
Economists surveyed by Dow Jones Newswires were expecting a lower reading of 5.9. Sub-gauges for economic expectations, income expectations and consumers' willingness to make purchases all rose.
"The increase of the willingness to buy indicates that private consumption should be able to--at least partly--cushion the current slowdown of industrial production," said Carsten Brzeski, economist at ING Bank NV.
"The current optimism is welcome news for the economy." The rise contrasts with a steep fall in business sentiment reported by the Ifo institute, which said confidence in October was at its weakest in three years.
In France, the mood among consumers darkened slightly in October, reflecting the divide that exists between Germany and its less financially robust neighbors.
Although signs are emerging that Germany isn't immune to the sovereign-debt crisis, its economy has continued to grow while France's has stagnated and the economies of Italy, Spain, Greece and several others have shrunk.
French consumer confidence fell in October from September as households became less sure of their financial situation and expected higher unemployment, statistics agency Insee said.
The agency's gauge of sentiment fell to 84 in October from 85 in September. A gauge of business sentiment in Italy unexpectedly fell in October for the first time since June, national statistics institute Istat said Friday.
Confidence in Italy's industrial sector fell to 87.6 in October from 88.3 in September, Istat said. The fall was due mostly to a drop in the outlook for orders in the intermediate-goods sector.
The average forecast of 11 economists polled by Dow Jones Newswires was for an increase to 88.7. Spain's statistics office said Friday the country's jobless rate rose to 25.02% in the third quarter from 24.63% in the second.
The rate is the highest in the euro zone. Spain is suffering from the collapse of a decade-long housing bubble and deep spending cuts as the government tries to cut its annual growth in debt to 6.3% of gross domestic product from well above 9% of GDP last year.
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