For August (s.a.)
Provided by EuroStat
Official Release: PDF

The unemployment rate in the Euro-zone rose unexpectedly to 7.5% in August, and July's rate was revised up to 7.4%. The figure is the highest since April 2007. With the economy contracting in the 2nd quarter, companies are cutting costs by reducing payroll. The credit crisis will only exacerbate job losses going forward. Sales are faltering as consumer confidence is mired in low levels and they cut back on spending. The ECB may have to take a harder look at the economic hardship of the continent and move to a more dovish stance and think about lowering interest rates.

From the Release: "The euro area (EA15) seasonally-adjusted unemployment rate stood at 7.5% in August 2008, compared with 7.4% in July. It was 7.4% in August 2007. The EU27 unemployment rate was 6.9% in August 2008, unchanged compared with July. It was 7.1% in August 2007.

Eurostat estimates that 16.572 million men and women in the EU27, of which 11.596 million were in the euro area, were unemployed in August 2008. Compared with July 2008, the number of persons unemployed increased by 67 000 in the EU27 and by 90 000 in the euro area. Compared with August 2007, unemployment fell by 225 000 in the EU27 but rose by 272 000 in the euro area."

Provided by: European Central Bank
Official Decision: Press Release
Official Release: Introductory Statement

The ECB decided to hold rate steady at a seven-year high of 4.25% in order to curb inflation, even as recent events have shown that governments on the continent have had to take emergency actions in order to limit the fallout from the credit crunch. Governments had to step in and rescue 5 banks, banks borrowed a record amount from the ECB at its emergency rate, and the price of credit soared. With credit markets freezing up, the ECB has had to inject billions of euors and dollars into the banking system.

With the risk to growth growing as a result, and evident in the data for the second and third quarters, the ECB will be hard pressed to keep rates at their current levels going forward. Data also points to the fact that inflation seems to have peaked over the summer at 4% and September's flash estimate has annual CPI at 3.6%, as oil and other commodity prices came down from their record levels over the summer.

The EUR/USD fell below 1.38, a fresh 1-year low for the pair, during Trichet's press conference. In the conference he said risks to CPI and PPI were declining but that the ECB was still concerned about second round effects like labor costs rising. His phrasing "inflation risks have diminished somewhat" is the same sentence that was used in May 2001 when the ECB cut rates. Expectations were for the ECB President to soften his bias and the market seems to be responding to his comments in just that way.

Final Version for September

Germany: 50.2, prel. 49.3, pr. 51.4 (Aug), 53.1 (Jul), 52.1 (Jun),
France: 50.1, prel. 50.4, pr. 48.0 (Aug), 47.5 (Jul), 50.1 (Jun),
Italy: 49.4, pr. 48.5 (Aug), 45.6 (Jul), 50.1 (Jun), 48.1 (May)

Provided by: European Central Bank
Official Release: Statement

After softening its bias in its latest meeting due to the faltering economic conditions in the Euro-zone economy, the ECB joined other central banks today in cutting rates by .50% in order to ease borrowing costs at a time when credit markets are frozen around the world. It has found that inflationary pressures have dimished with the fall in commodity prices and they are not expected to recover as the global economy heads for a downturn.

From the Release: "The Governing Council of the ECB, by means of teleconferencing, has taken the following monetary policy decisions:

• The minimum bid rate on the main refinancing operations of the Eurosystem will be reduced by 50 basis points to 3.75 %, with effect from the main refinancing operation to be settled on 15 October 2008.

• The interest rate on the marginal lending facility will be reduced by 50 basis points to 4.75 %, with immediate effect.

• The interest rate on the deposit facility will be reduced by 50 basis points to 2.75 %, with immediate effect.

In the euro area, upside inflationary risks have recently decreased further. It remains imperative to avoid broad-based second-round effects in price and wage-setting. Keeping inflation expectations firmly anchored in line with our objective and securing price stability in the medium term will support sustainable growth and employment and contribute to financial stability."

Final Version for September
Provided by: EuroStat
Flash Release: PDF

CPI m/m: 0.2%, forecast 0.1%, pr. -0.1% (Aug), -0.2% (Jul)
Core CPI y/y: 1.9%, forecast 1.9%, pr. 1.9%

European inflation slowed for a second month in September on a decline in oil prices. The annual rate fell to 3.6%, matching the flash estimate. It was at 3.8% in August. On the month however, prices rose 0.2%, higher than the consensus forecast. Still, cooling inflation should make it easier for the ECB to cut interest rates again in response to the financial turmoil and economic slowdown in the Euro-zone. With growth expected to continue to deteriorate the ECB may have to follow through with another cut to add to the 50 basis point reduction we saw last week as part of a global coordinated effort to ease borrowing costs.

From the Release: "Euro area annual inflation was 3.6% in September 2008, down from 3.8% in August. A year earlier the rate was 2.1%. Monthly inflation was 0.2% in September 2008.

The main components with the highest annual rates in September 2008 were housing (6.2%), transport (5.8%) and food (5.7%), while the lowest annual rates were observed for communications (-2.6%), recreation & culture (0.1%) and clothing (0.7%). Concerning the detailed sub-indices, fuels for transport (+0.44 percentage points), heating oil (+0.24), gas (+0.20) and milk, cheese & eggs (+0.15) had the largest upward impacts on the headline rate, while telecommunications (-0.20) and garments (-0.15) had the biggest downward impacts.

The main components with the highest monthly rates were clothing (6.5%), education (0.8%) and household equipment (0.5%), and the lowest were recreation & culture and hotels & restaurants (both -1.1%) and transport (-0.6%). In particular, garments (+0.32 percentage points) and footwear (+0.08) had the largest upward impacts, while accommodation services (-0.14), package holidays (-0.12), fuels for transport and air transport (-0.07 each) had the biggest downward impacts."

For August (s.a.)
Provided by: European Central Bank

Current Account (n.s.a.): -7.9B, pr. -1.1B (Jul), -1.0B (Jun), -21.4B (May), -9.2B (Apr)

Preliminary Version for October

Germany: 43.3, pr. 47.4 (Sep), 49.7 (Aug), 50.9 (Jul), 52.6 (Jun), 53.6 (May)
France: 40.8, pr. 43.0 (Sep), 45.8 (Aug), 45.1 (Jul), 49.2 (Jun), 51.5 (May)
Italy: pr. 44.4 (Sep), 47.1 (Aug), 45.3 (Jul), 46.9 (Jun), 48.0 (May)
Spain: pr. 38.3 (Sep), 42.4 (Aug), 39.2 (Jul), 40.6 (Jun), 43.8 (May)

The manufacturing PMI for the Euro-zone came in at a very weak 41.3, far below the 44.0 forecast by economists. The main countries on the European continent are contracting at an alarming pace, as both domestic and foreign demand falters in the face of slowing global growth and tough conditions for borrowing as credit markets have frozen up. The data suggests that the Euro-zone is likely already in a recession, and now expectations for its severity and length are becoming more pessimistic. The ECB cut rates by 50 basis points to 3.75% as part of a global coordinated move to reduce borrowing costs. Expectations are now that the Governing Council will slash rates another 50 basis points in their meeting next month.

European stocks plummeted overnight, and the Euro has seen a very strong sell-off this week. The Euro fell to a 2-year low against the Dollar and a six-year low against the Yen.

For September

Provided by the European Central Bank
Current Release: PDF

From the release: The annual rate of growth of M3 decreased to 8.6% in September 2008, from 8.8% in August 2008.1 The three-month average of the annual growth rates of M3 over the period July 2008 - September 2008 declined to 8.9%, from 9.2% in the period June 2008 - August 2008.

For October
Provided by: European Commission
Official Release: PDF (Save Link As...)

Services: -6, forecast -2, pr. 0 (Sep), 1 (Aug), 1 (Jul), 9 (Jun), 8 (May),
Industrial: -18, forecast -14, pr. -12 (Sep), -9 (Aug), -8 (Jul), -5 (Jun), -2 (May)
Consumer: -24, forecast -20, pr. -19 (Sep), -19 (Aug), -20 (Jul), -17 (Jun), -15 (May)

The European Commission's index of executive and consumer sentiment dropped 7.1 points to 80.4 for the October period. That was a record drop for the index and reflected weaker confidence at all levels: services, industrial and consumer. The overall index is now at a 15 year low. The Euro-zone economy was feeling the strain of higher credit costs and weaker global demand before the most recent bout of crisis in financial markets intensified in late September. With expectations of weaker consumer spending, companies will scale back on production and services. The ECB cut rates by 50 basis points, and with inflation gauges easing, it is expected to follow that up with more cuts before the end of the year.  

From the Release: "In October, the Economic Sentiment Indicator (ESI) declined sharply in both the EU and the euro area. It fell by 7.4 points in the EU and by 7.1 points in the euro area, to 77.5 and 80.4 respectively. In both regions, the ESI recorded its largest month-on-month decline ever to hit its lowest level since 1993. In both the EU and the euro area, confidence fell considerably across all sectors. Consumer confidence reached its lowest level in close to fifteen years. The services confidence indicator recorded its lowest level since the introduction of the survey twelve years ago. Even though both the industry and construction confidence indicators also slipped significantly in October, they still stand clearly above the lows recorded in 1992 and 1993, respectively."

Preliminary Version for October
Provided by: EuroStat
Official Release: PDF

CPI m/m: pr. 0.2% (Sep), -0.1% (Aug), -0.2% (Jul)
Core CPI y/y: pr. 1.9% (Sep), 1.9% (Aug)

Euro-area annual inflation is expected to be 3.2% in October, according to the flash estimate from Eurostat. It was 3.6% in September. Slowing inflation will give the European Central Bank more room to cut rates as it focuses on getting the economy growing again.