Confidence in the 17-state eurozone fell sharply this month, data showed yesterday, adding pressure on the European Central Bank to make moves to boost the bloc’s economy when it meets on Thursday.
The combined reading of business and consumer confidence, released by the European Commission, fell 1.5 points from last month to 88.6 points because of especially low sentiment in the services sector.
The EU-wide index figure fell even more sharply, dropping by 1.8 points to 89.7 points this month, the data showed.
Data showed that confidence in the manufacturing sector fell 1.5 points, while services slumped 4.1 points as sentiment toward future demand and activity darkened.
However, consumer confidence rose by 1.3 points as attitudes toward unemployment became more positive, the data showed.
By country, confidence fell most steeply in the union’s biggest economies, with Germany losing 2.3 points and France 2 points. By contrast, measures of confidence rose in the Netherlands by 0.2 points and by 0.9 points in Spain.
Meanwhile, consumer spending in the US rose more than projected for last month, reflecting a jump in outlays for services that is unlikely to be repeated as the biggest part of the US’ economy softens this quarter.
Household purchases, which account for about 70 percent of the US economy, rose 0.2 percent after posting a 0.7 percent gain the previous month, a US Department of Commerce report showed yesterday.
The median estimate in a Bloomberg survey of 74 economists forecast that spending would be little changed. Incomes increased less than forecast and inflation cooled to the lowest level in more than three years.
A slower pace of growth and less inflation means US Federal Reserve policymakers will probably reaffirm that they will keep pumping money into financial markets after they meet this week.
Adjusting consumer spending for inflation, which renders the figures used to calculate GDP, purchases rose 0.3 percent for a second straight month, the report said.