Europe’s Record Jobless Rate Seen Resisting Recovery
Economic confidence rose more than forecast in September, with sentiment improving in the industrial sector as well as in services, retail and financial services. Even so, euro-area inflation slowed for a second month in September, led by falling energy prices, according to data today. Euro-Area Inflation Consumer prices rose an annual 1.1 percent after a 1.3 percent increase in August, the European Unions statistics office said. The median forecast in a Bloomberg News survey of 34 economists was for 1.2 percent growth. The core inflation rate, which excludes volatile food and energy costs, was 1 percent. Elsewhere, U.K. mortgage approvals rose to the highest in more than five years in August and Hometrack said the nations house prices rose the most in more than six years this month. In the U.S., congress is leaving itself just one day to end a budget stalemate that raises the risk of the first government shutdown in 17 years as Republicans sought to shift blame for the gridlock to Democrats. The Senate will reconvene this afternoon, when it will reject a House plan to delay and limit President Barack Obama s Affordable Care Act. In response, the House would add another provision to the spending measure and send it back to the Senate, said Representative Kevin McCarthy , the top House Republican vote counter. Modest Recovery Business activity in the U.S.
British businesses ranging from huge financial corporations to hairdressers again reported solid growth, rounding off the strongest quarter in more than 16 years. Overall, the surveys painted a slightly brighter picture than the “weak, fragile and uneven” recovery alluded to on Wednesday by European Central Bank president Mario Draghi. On balance, they also boded well for the global economy. Indexes from China showed growth picking up there, even if data due later from the U.S. are expected to show a slight easing in the expansion for non-manufacturing companies, which have consistently outpaced their European peers. The main disappointment in Europe was Spain, where a rise in business activity during August – the first in more than two years – proved short-lived as firms slipped back into decline. Still, the data pointed to a broadening recovery across the euro zone, said Nick Matthews, senior European economist at Nomura, though that had yet to be borne out in official data. “The hard data so far for the third quarter has perhaps a bit more on the disappointing side – in particular industrial production …was very weak in July,” said Matthews. “We expect this to bounce back, but this suggests we could see a slightly slower pace of growth in the third quarter relative to the second quarter.” PMI compiler Markit said its surveys suggested the euro zone economy grew around 0.2 percent from July through September, a touch below the 0.3 percent registered in the second quarter. Nomura’s Matthews said they suggested a slightly stronger rate of growth for the final months of the year. STILL NOT ON SOLID GROUND Markit’s Eurozone Services PMI rose to 52.2 in September from August’s 50.7, little changed from a preliminary reading of 52.1. Readings above 50 signify growth. Businesses in No.1 economy Germany reported rising new orders and staffing levels, while France’s private sector grew for the first time in a year and a half.