The Eurozone economy expanded less than expected in the third quarter with spending by households propping up activity as exports slowed and – surprisingly, according to Barclays – investment in Germany fell.
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European Central Bank (ECB) President Mario Draghi has not helped the currency with his continued dovish comments, which seem to be in favour of the ECB broadening its quantitative easing programme, and his willingness to use “all available instruments” to boost the eurozone’s economy.
In the third quarter, there were 43.1m people in employment in Germany, 343,000 more than a year earlier. The buck is posting its largest gain against the Euro, after Eurozone GDP came in weaker than expected.
Economists had expected sales to climb by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month. This follows a 1.6% increase in the second quarter and a 1.2% increase in the first quarter of 2015.
In company news, aerospace and engineering firm Rolls-Royce lost 3.97%, suffering losses for a second day running after it said on Thursday that earnings for the year will be at the low end of guidance as it downgraded its expectations for next year and warned of a possible dividend cut. Greece swung from growing 0.4% in the second quarter to shrinking 0.5%.
Germany’s preliminary Q3 GDP printed at 0.3%, which was in line with forecasts but below Q2’s expansion of 0.4%.
The slowdown means it will take longer to reduce the eurozone’s very high unemployment rates, and use up other forms of spare capacity in the economy.
The figures have increased expectations that the European Central Bank will step up its monetary stimulus to the economy next month. “It is estimated that the number of the employed has contracted by 0.1% from the third quarter of 2014”, Statistics Finland said in a statement.
“It is now hard to see euro zone growth stepping up a gear”, said Howard Archer, economist at IHS Global Insight.
The eurozone figures are due at 11:00 a.m. local.
Germany’s gross domestic product (GDP) increased by 0.3 percent quarter on quarter, said German federal statistics office Destatis.
German economic growth moderated in the third quarter on weak investment and foreign trade, while the French economy gained momentum on the back of domestic demand.
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European stocks ended the week on a downbeat note as data showed growth in the Eurozone unexpectedly slowed in the third quarter, and investors mulled the possibility of a U.S. rate hike next month.
