Wednesday October 31 2018
Euro Area Jobless Rate Steady at 8.1% in September
Eurostat | Stefanie Moya | stefanie.moya@tradingeconomics.com

The unemployment rate in the Euro Area was unchanged at 8.1 percent in September 2018, the same as in the previous month’s figure, below 8.9 percent a year earlier and in line with market expectations. It remained the lowest jobless rate since November 2008.

Compared with August, the number of unemployed in the Euro Area rose by 2,000 to 13.153 million. Compared with the previous year, it declined by 1.309 million.

Considering the European Union as a whole, the unemployment rate stood at 6.7 percent in September, stable compared to the prior month and down from 7.5 percent a year earlier. It was the lowest rate recorded in the EU28 since series began in January 2000. There were 16.574 million people unemployed, a decrease of 35,000 from the previous month and of 1.793 million from September 2017.

Among EU Member States, the lowest jobless rates in September were registered in the Czech Republic (2.3 percent), Germany and Poland (both 3.4 percent). The highest unemployment rates were observed in Greece (19.0 percent in July 2018) and Spain (14.9 percent). Compared with a year ago, the largest decreases were recorded in Cyprus (7.4 percent from 10.2 percent), Croatia (8.2 percent from 10.5 percent), Greece (19.0 percent from 20.9 percent between July 2018 and July 2017), Portugal (6.6 percent from 8.5 percent) and Spain (14.9 percent from 16.7 percent).

The youth unemployment rate was 14.9 percent in the EU28 and 16.8 percent in the Euro Area, compared with 16.5 percent and 18.3 percent respectively in September 2017. The lowest rates were observed in Germany and the Czech Republic (both 6.3 percent) and the Netherlands (7.5 percent), while the highest were registered in Greece (37.9 percent in July 2018), Spain (34.3 percent) and Italy (31.6 percent).




Wednesday October 31 2018
Eurozone October Inflation Rate at Near 6-Year High
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

The annual inflation rate in the Euro Area is expected to pick up to 2.2 percent in October 2018 from 2.1 percent in the previous month and in line with market consensus. That should be the highest inflation rate since December 2012 on the back of higher prices of services, energy, processed food and industrial goods.

Looking at the main components of euro area inflation, prices are expected to rise at a faster pace for services (1.5 percent vs 1.3 percent in September); energy (10.6 percent vs 9.5 percent); processed food, alcohol & tobacco energy (2.3 percent vs 2.2 percent) and non-energy industrial goods (0.4 percent vs 0.3 percent). Meanwhile, inflation should slow for unprocessed food (2.1 percent vs 3.2 percent).

Annual core inflation, which excludes volatile prices of energy, food, alcohol & tobacco and at which the ECB looks in its policy decisions, is likely to increase to 1.1 percent in October from 0.9 percent in September and above market consensus of 1 percent.




Tuesday October 30 2018
Eurozone Q3 GDP Growth Weakest in 4 Years
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Eurozone economy grew 0.2 percent on quarter in the three months to September 2018, following a 0.4 percent expansion in the previous period and missing market expectations of a 0.4 percent advance, a flash estimate showed. It was the weakest growth rate since the second quarter of 2014.

Among countries for which data is already available, Italian economy stalled following a 0.2 percent expansion in the previous period. It was the weakest performance since the last quarter of 2014. On the other hand, France's GDP growth rate was the strongest in almost a year (0.4 percent vs 0.2 percent in Q2) and Belgium's economy expanded at a faster pace (0.4 percent vs 0.3 percent). Lithuania's GDP contracted for the first time in eight years (-0.4 percent vs 0.9 percent). Germany, the biggest economy in the Euro Area, is expected to release preliminary GDP estimates in two weeks.

Compared with the same quarter of the previous year, the Euro Area economy expanded 1.7 percent in the three months to September, following a 2.2 percent growth in the previous period and missing market consensus of 1.8 percent.

Considering the European Union as a whole, GDP growth eased to 0.3 percent quarter-on-quarter (vs 0.5 percent in Q2); and to 1.9 percent year-on-year (vs 2.1 percent in Q2).




Thursday October 25 2018
ECB Leaves Monetary Policy Unchanged
ECB | Joana Ferreira | joana.ferreira@tradingeconomics.com

The ECB held its benchmark refinancing rate at 0 percent on October 25th and said it will continue to make net purchases under the asset purchase programme at the new monthly pace of €15 billion until the end of December 2018. Policymakers expect key interest rates to remain at record low levels at least through the summer of 2019.

The deposit facility rate and the marginal lending facility rate were also left unchanged at -0.4 percent and 0.25 percent, respectively.

Excerpts from the ECB Introductory Statement:

Incoming information, while somewhat weaker than expected, remains overall consistent with an ongoing broad-based expansion of the euro area economy and gradually rising inflation pressures. The underlying strength of the economy continues to support our confidence that the sustained convergence of inflation to our aim will proceed and will be maintained even after a gradual winding-down of our net asset purchases. At the same time, uncertainties relating to protectionism, vulnerabilities in emerging markets and financial market volatility remain prominent. Significant monetary policy stimulus is still needed to support the further build-up of domestic price pressures and headline inflation developments over the medium term. This support will continue to be provided by the net asset purchases until the end of the year, by the sizeable stock of acquired assets and the associated reinvestments, and by our enhanced forward guidance on the key ECB interest rates. In any event, the Governing Council stands ready to adjust all of its instruments as appropriate to ensure that inflation continues to move towards the Governing Council’s inflation aim in a sustained manner.

Let me now explain our assessment in greater detail, starting with the economic analysis. Euro area real GDP increased by 0.4%, quarter on quarter, in both the first and the second quarter of 2018. Incoming information, while somewhat weaker than expected, remains overall consistent with our baseline scenario of an ongoing broad-based economic expansion, supported by domestic demand and continued improvements in the labour market. Some recent sector-specific developments are having an impact on the near-term growth profile. Our monetary policy measures continue to underpin domestic demand. Private consumption is fostered by ongoing employment growth and rising wages. At the same time, business investment is supported by solid domestic demand, favourable financing conditions and corporate profitability. Housing investment remains robust. In addition, the expansion in global activity is expected to continue supporting euro area exports, though at a slower pace.

The risks surrounding the euro area growth outlook can still be assessed as broadly balanced. At the same time, risks relating to protectionism, vulnerabilities in emerging markets and financial market volatility remain prominent.

Euro area annual HICP inflation increased to 2.1% in September 2018, from 2.0% in August, reflecting mainly higher energy and food price inflation. On the basis of current futures prices for oil, annual rates of headline inflation are likely to hover around the current level over the coming months. While measures of underlying inflation remain generally muted, they have been increasing from earlier lows. Domestic cost pressures are strengthening and broadening amid high levels of capacity utilisation and tightening labour markets. Looking ahead, underlying inflation is expected to pick up towards the end of the year and to increase further over the medium term, supported by our monetary policy measures, the ongoing economic expansion and rising wage growth.




Wednesday October 17 2018
Eurozone September Inflation Rate Confirmed at 2.1%
Eurostat | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The annual inflation rate in the Euro Area was confirmed at 2.1 percent in September of 2018, slightly above 2.0 percent in the previous month. Main upward pressure came from prices of energy and unprocessed food.

Prices advanced at a faster pace for energy (9.5 percent vs 9.2 percent in August) and unprocessed food (3.2 percent vs 2.5 percent) while cost eased for processed food (2.2 percent vs 2.4 percent). Meanwhile, inflation was steady for services (1.3 percent) and non-energy industrial goods (at 0.3 percent).

Among Eurozone's largest economies, the highest annual rate was registered in France (2.5 percent), followed by Spain (2.3 percent), Germany (2.2 percent) and Italy (1.5 percent). 

Annual core inflation, which excludes volatile prices of energy, food, alcohol and tobacco and at which the ECB looks in its policy decisions, was also confirmed at 0.9 percent in September, from a downwardly revised 0.9 percent in August. 

On a monthly basis, consumer prices inched up 0.5 percent in September, following a 0.2 percent increase in the previous month and matching market consensus.


Tuesday October 16 2018
Euro Area Trade Surplus Narrows in August
Eurostat | Stefanie Moya | stefanie.moya@tradingeconomics.com

The trade surplus in the Euro Area decreased to EUR 11.7 billion in August of 2018 from EUR 15.24 billion a year earlier and compared with market consensus of EUR 15.3 billion. It was the smallest trade surplus since January, as imports advanced 8.4 percent year-on-year to EUR 169.8 billion and exports rose at a softer 5.6 percent to EUR 181.5 billion. Intra-Euro trade increased to EUR 140.7 billion, up by 5.1 percent compared with August last year.

In the first eight months of the year, exports of goods advanced 4.6 percent year-on-year to EUR 1501.1 billion, while imports went up 5.5 percent to EUR 1371.4 billion. As a result the Euro Area recorded a surplus of EUR 129.6 billion from EUR 140.4 billion. Intra-Euro area trade rose to EUR 1286.9 billion, up by 6.2 percent compared with the same period of 2017.

Considering the European Union, exports of goods increased by 9.2 percent to EUR 159.2 billion and imports jumped 10.3 percent to EUR 167.6 billion, widening the trade deficit to EUR 8.4 billion from EUR 6.1 billion in August 2017. Intra-EU28 trade rose to EUR 262.9 billion, up by 4.5 percent compared with the same month a year earlier.

In January to August 2018, EU28 exports of goods went up by 4.2 percent year-on-year to EUR 1286.6 billion and imports rose by 5.3 percent to EUR 1299.6 billion. As a result, the EU28 trade gap increased to EUR 13.0 billion from EUR 0.3 billion in 2017. Higher exports of goods were driven by sales of machinery and vehicles (2.3 percent), chemicals (6.5 percent), other manufactured goods (3.9 percent), energy (15.6 percent) and raw materials (3.0 percent), while sales of food and drinks fell 0.4 percent). Exports advanced to all main export partners, namely India (11.2 percent), Canada (9.1 percent), Norway (6.6 percent), the US (6.4 percent) and Japan (6.3 percent). Higher imports were boosted by purchases of energy (21.8 percent), machinery and vehicles (2.6 percent), other manufactured goods (2.2 percent), chemicals (2.0 percent) and raw materials (2.6 percent). In contrasts, purchases of food and dircks declined (-1.3 percent). China was the biggest import partner, with purchases increasing 3.1 percent; the US was the second highest import partner rising 0.4 percent; Russia (+14.4 percent) and Norway (+10.8 percent).




Friday October 12 2018
Eurozone Industrial Output Rises Faster in August
Eurostat | Joana Taborda | joana.taborda@tradingeconomics.com

Industrial production in the Euro Area increased 0.9 percent year-on-year in August of 2018, following a 0.3 percent rise in July and beating market expectations of a 0.2 percent drop. Production rose faster for non-durables but continued to fall for energy and durable goods.

Production went up for non-durables (3.1 percent compared to a flat reading in July) and capital goods (1.3 percent compared to 1.7 percent) but fell for intermediate goods (-0.4 percent compared to 0.1 percent), energy (-0.3 percent compared to -1.8 percent) and durables (-1.1 percent compared to -2.3 percent). 

In the EU28, total output went up 1.2 percent, higher than 1 percent in July. Rises were seen in production of intermediate goods (0.4 percent compared to 0.8 percent), capital goods (1.6 percent compared to 2 percent), durables (1.2 percent compared to 0.2 percent) and non-durables (2.8 percent compared to 0.8 percent) but continued to fall for energy (-0.7 percent, the same as in July). 

Among Member States for which data are available, the highest increases in industrial production were registered in Ireland (+15.1 percent), Slovenia (+7 percent) and Latvia (+6.4 percent). The largest decreases were observed in Denmark (-3.9 percent), Portugal (-3.3 percent) and Luxembourg (-2.6 percent). Production fell 0.5 percent in Germany and 0.8 percent in Italy but rose 1.7 percent in France.

On a monthly basis, industrial production in the Euro Area jumped 1 percent in August of 2018, following a downwardly revised 0.7 percent fall in July and beating market expectations of a 0.4 percent rise. It is the fist increase in industrial output in three months, as production rose faster for energy (1.9 percent compared to 0.7 percent in July) and capital goods (1.4 percent compared to 1 percent) and rebounded for intermediate goods (0.4 percent compared to -1 percent), durables (1.5 percent compared to -1.9 percent) and non-durables (1.4 percent compared to -1 percent).

Considering the EU 28, production went up 0.8 percent, recovering from a 0.6 percent fall in July. The output rebounded for intermediate goods (0.3 percent compared to -0.7 percent), durables (0.8 percent compared to -1.1 percent) and non-durables (1.1 percent compared to -1.2 percent) and continued to rise for energy (0.9 percent compared to 1 percent) and capital goods (1.2 percent compared to 0.6 percent). 

Among Member States for which data are available, the highest increases in industrial production were registered in Malta (+9.9 percent), Ireland (+8 percent) and Hungary (+3.8 percent). A decrease was observed in Denmark (-4.5 percent). Production in Germany was flat but rose in France (0.3 percent) and Italy (1.7 percent).




Thursday October 11 2018
ECB Shows Concerns Over Protectionism and EM Volatility
ECB | Joana Taborda | joana.taborda@tradingeconomics.com

ECB policymakers consider that risks to the Euro Area growth outlook were broadly balanced and the economy shows a considerable degree of domestic resilience. However, risks related to rising protectionism, vulnerabilities in emerging markets and financial market volatility gained more prominence recently, minutes from the ECB's September meeting showed.

Excerpts from the Account of the monetary policy meeting of the Governing Council of the European Central Bank, held in Frankfurt am Main on Wednesday and Thursday, 12-13 September 2018:

Risks to the growth outlook could still be assessed as broadly balanced. At the same time, risks relating to the threat of protectionism, vulnerabilities in emerging markets and financial market volatility had gained more prominence recently.

Members also exchanged views about the implications of recent developments in emerging market economies. It was noted that the depreciation of these economies’ currencies had so far been relatively contained and was primarily focused on countries that had weak fundamentals, relatively high foreign debt levels and, in particular, exposure to the US dollar. More generally, the point was made that growth in emerging market economies had made a sizeable positive contribution to global activity in the past decade, and that a natural adjustment was taking place. At the same time, there were indications that the euro area was moving away from reliance on external demand towards more domestic sources of expenditure, which should increase its resilience.

On the whole, the euro area economy was seen to have shown a considerable degree of domestic resilience so far and to have become more robust in recent years, in the context of higher capacity utilisation rates and partly as a result of significant reforms undertaken by many euro area countries since the financial crisis. However, at the same time, caution was seen as warranted since heightened uncertainty in the global environment might yet impact the euro area more significantly over time.

Against this background, risks to the euro area growth outlook were generally assessed to have remained broadly balanced overall, with risks relating to rising protectionism, vulnerabilities in emerging markets and financial market volatility having gained more prominence recently. While it was remarked that a case could also be made for characterising the risks to activity as now being tilted to the downside given the clear prevalence of downward global risks, it was agreed that the assessment that risks were broadly balanced should be maintained, also as the underlying strength of the economy was judged to be mitigating downside risks to activity.

In the light of the confirmation of the medium-term inflation outlook, members agreed that the June 2018 monetary policy decisions remained appropriate and called for a reaffirmation of the prevailing policy posture. Accordingly, all members supported the proposal made by Mr Praet in his introduction that, in line with the anticipation expressed at the Governing Council’s June monetary policy meeting, the monthly pace of net asset purchases would be reduced to €15 billion from October to December 2018. It was also seen as prudent to reiterate the Governing Council’s anticipation that – subject to incoming data confirming the medium-term inflation outlook – net purchases would then end. This was seen to be consistent with the Governing Council’s data-driven approach to monetary policy and fully in line with the decisions taken at the Governing Council’s June monetary policy meeting. It was underlined that uncertainties emanating from rising protectionism, vulnerabilities in emerging markets and financial market volatility had become more prominent recently, which continued to call for prudence in the formulation of the monetary policy stance.


Monday October 01 2018
Eurozone Unemployment Rate Falls to Near 10-Year Low
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

The unemployment rate in the Euro Area edged down to 8.1 percent in August 2018 from the previous month's figure of 8.2 percent and below 9 percent a year earlier. It was the lowest jobless rate since November 2008, as the number of unemployed continued to fall.

Compared with July, the number of unemployed in the Euro Area decreased by 102,000 to 13.220 million. Compared with the previous year, it fell by 1.419 million.

Considering the European Union as a whole, the unemployment rate stood at 6.8 percent in August, stable compared to the previous month and down from 7.5 percent a year ago. It was the lowest rate recorded in the EU28 since April 2008. There were 16.657 million people unemployed, a decrease of 114,000 from the previous month and of 1.921 million from May 2017.

Among EU Member States, the lowest unemployment rates in August were recorded in the Czech Republic (2.5 percent), Germany and Poland (both 3.4 percent). The highest unemployment rates were observed in Greece (19.1 percent in June 2018) and Spain (15.2 percent). Compared with a year ago, the largest decreases were registered in Cyprus (7.5 percent from 10.5 percent), Croatia (8.5 percent from 10.9 percent), Greece (19.1 percent from 21.3 percent between June 2018 and June 2017) and Portugal (6.8 percent from 8.8 percent).

The youth unemployment rate was 14.8 percent in the EU28 and 16.6 percent in the Euro Area, compared with 16.6 percent and 18.5 percent respectively in August 2017. The lowest rates were observed in Germany (6.2 percent),  the Czech Republic (6.3 percent) and the Netherlands (7.7 percent), while the highest were recorded in Greece (39.1 percent in June 2018), Spain (33.6 percent) and Italy (31 percent).


Friday September 28 2018
Eurozone Inflation Rate Climbs Above 2%
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

The annual inflation rate in the Euro Area is expected to pick up to 2.1 percent in September 2018, matching July's five-and-a-half-year high and market expectations.

Looking at the main components of euro area inflation, prices are expected to rise at a faster pace for both energy (9.5 percent vs 9.2 percent in August) and unprocessed food (3.2 percent vs 2.5 percent). Meanwhile, inflation should slow for processed food, alcohol & tobacco (2.3 percent vs 2.4 percent) and remain unchanged for services (at 1.3 percent) and non-energy industrial goods (at 0.4 percent)

Annual core inflation, which excludes volatile prices of energy, food, alcohol & tobacco and at which the ECB looks in its policy decisions, is likely to ease to 0.9 percent in September from 1 percent in August, below market consensus of 1.1 percent.