In July, EC’s economic confidence weakened further, falling for a fifth straight month. The headline index dropped from an upwardly revised 105.4 to 103.2, below the consensus estimate of 104.0. The details show that weakness was broad-based as industrial (1.1 from 3.5), services (7.9 from 10.1), retail (- 3.5 from -2.6), construction (-24.5 from -23.5) and consumer (-11.2 from -9.7) confidence all weakened significantly in July. National data confirm the wide-spread weakness led by Italy and Spain, but also in Belgium, the Netherlands and Germany economic confidence deteriorated sharply. Sentiment deteriorated further in Portugal, while in Greece, economic confidence picked up slightly in July. The European Commission’s confidence indicators confirm that growth is slowing significantly also in core European countries, while in the periphery sentiment remains extremely fragile.
German unemployment fell by 11 000 in July to a total level of 2.957 million, slightly weaker than the consensus, which was looking for a drop by 15 000. Nevertheless, German unemployment continues its unbroken downward trend since June 2009. The unemployment rate stayed unchanged at 7.0% in July, the lowest level since the unification, while the number of vacancies picked up slightly in July, rising by 3 000 after an 1 000 increase in June. While the German unemployment data were unsurprisingly slightly weaker than expected, as the unemployment rate is already at record low levels and the German recovery is showing signs of slowdown.