In March, European Commission’s economic confidence weakened marginally, which was broadly in line with expectations. Economic confidence dropped from an upwardly revised 94.5 to 94.4, while the consensus was looking for a marginal increase to 94.5. The breakdown was mixed as industrial (-7.2 from -5.7) and construction (-26.5 from -24.6) sentiment weakened in March, while services (-0.3 from -0.9) and retail (-26.5 from -24.6) confidence improved. Consumer confidence was downwardly revised from -19.0 to -19.1 compared with a reading of -20.3 in February. Looking at the national data, economic confidence improved in Belgium (95.8 from 94.5), Greece (75.7 from 74.9), France (95.5 from 93.5), Italy (88.8 from 85.3), Portugal (77.1 from 75.9) and Austria (98.6 from 96.2), while sentiment weakened in Germany (104.3 from 106.7), Spain (90.9 from 92.0) and the Netherlands (89.4 from 90.7). After the weak PMI’s last week, this outcome confirms that sentiment remains very fragile in the euro zone and that the economy probably continued to contract in the first quarter of this year.
German unemployment fell in March for a fifth consecutive month. In March, unemployment dropped by 18 000, almost twice as much as expected (-10 000) and the February outcome was downwardly revised from flat to -3 000. The total number of people unemployed fell to 2.841 million from 2.859 million. Employment, which is reported with an extra month lag, increased by 40 000 in February to a total level of 41.483 million. The number of vacancies dropped from 494 000 to 495 000. The German unemployment rate dropped from 6.8% to 6.7%, the lowest level in the 21-year history of the data. Despite the recent signs of a weakening in German growth, the labour market seems to remain well on track for now.