Economists were more optimistic than businesses and consumers in the eurozone, as figures show economic confidence reached its lowest level in three years. German unemployment was up for a fifth straight month, and in France, where almost one out of every four young people is unemployed, President Francois Hollande pushed a state-subsidized program to hire the young.
Bloomberg reported Thursday that while economists had predicted a median decrease in economic confidence to 87.5, the actual numbers released by the European Commission (EC) in Brussels came in at 86.1 for August, down from 87.9 in July. As the eurozone economy shrank 0.2% in Q2, moving ever closer to recession, both consumers and executives in the region had little cause for optimism.
“The euro-region economy will continue to show negative growth rates, with a moderate contraction in the second half,” according to Uwe Duerkop, an economist at Landesbank Berlin. Duerkop was quoted saying, “The question is, what will happen next in terms of the crisis? I wouldn’t necessarily only expect negative news over the next months; a lot of adjustment measures have already been decided, and that’s why there’s a basis for this crisis to peter out.”
Negative news is still forthcoming, however. Germany’s unemployment rate rose more than expected. The Federal Labor Agency in Nuremberg said Thursday that those without a job numbered 2.9 million; that’s up a seasonally adjusted 9,000. Economists had predicted a median increase of only 7,000.