European Commission’s economic confidence extended its downtrend in Sep-tember. Economic confidence weakened from 98.4 to 95.0, while the consensus was looking for a decline to 96.0. The breakdown shows that weakness was wide spread with a significant decline in industrial (-5.9 from -2.7), services (0.0 from 3.7), con-struction (-26.0 from -23.4) and retail (-9.8 from -8.7) confidence. Consumer confi-dence was further downwardly revised from a first estimate of -18.9 to -19.1. National details show that economic confidence deteriorated in all countries led by Portugal, Italy and Greece. The decline was more moderate in Belgium, the Netherlands and Spain. This outcome provides further evidence that sentiment is deteriorating in all sectors, which will probably affect the real economy in the coming months.
In September, German unemployment fell sharply more than expected. Unem-ployment dropped by 26 000 to a total level of 2.922 million, while a decline by only 8 000 was forecast. The unemployment rate unexpectedly dropped, from 7.0% to 6.9%, while a further stabilization was expected. Also the number of vacancies picked up further in September, rising by 7 000 to a total level of 478 000. These data are encouraging and indicate that activity in Germany remains strong de-spite increasing signs that growth is slowing sharply in Europe’s largest economy.