Euro-update

Euro-Zone Business Sentiment Higher November, Consumers Seem Less Sanguine

Confidence among euro-zone industrial firms edged higher for a seventh straight month in November but consumers aren't sharing their optimism, as figures Thursday from the European Commission confirmed the fall reported in the preliminary consumer confidence release last week.

The mixed outlook could mean the economic recovery will take time to strengthen as consumer spending is a key driver of growth. When confidence weakens, the desire to spend usually falls, too.

However, news that sentiment in some sectors continues to improve should help drive job creation, something that will help boost consumer confidence going forward.

The figures showed that economic sentiment--which measures the mood across both consumers and businesses--rose to 98.5 in November, the highest level since August 2011 and up from 97.7 in October.

The main driver of that rise came from the services and industry sectors, while retailers' outlook was marginally brighter in November than a month earlier. Confidence among consumers and construction firms fell.

The euro zone emerged from an 18-month-long recession in the second quarter of this year, but preliminary data for the third quarter were disappointing as growth fell back to just 0.1% from 0.3%.