News ID: 235379
Published: 0930 GMT December 07, 2018

France offers euro economy small hope amid mixed German picture

France offers euro economy small hope amid mixed German picture
Published by thinglink.com

The euro area’s top two economies painted a mixed picture for the start to the final quarter of 2018, leaving the jury out on whether the region is in for a prolonged economic slowdown or a rebound in momentum.

French industrial output rose sharply in October, halting a recent disappointing trend as equipment manufacturing picked up. In Germany, production dropped, but there were signs of upward pressure in pay growth, bloomberg.com wrote.

The numbers come less than a week ahead of the European Central Bank’s next policy meeting, in which officials will at least have the improving wage figures to point to when deciding to cap their asset-purchase program.

Economists have been predicting a bounce-back in euro-area economic indicators for months but numbers have continuously disappointed since September. As a result, expectations for a rebound have dimmed somewhat and economists see slower policy tightening by the ECB.

Data on industrial performance can be volatile from month to month and annual changes often tell a different tale. Still, the French figures are reassuring as violent protests around the country could threaten consumer spending in the fourth quarter.

Consumer and energy goods were a drag in Germany, which is also recovering from a summer blip in car production after new emissions-testing standards were introduced.

Despite weaker output, German labor costs went up the most in almost two years in the third quarter, a separate release on Friday showed. Such wage pressures have given ECB officials confidence that inflation remains on track toward the institution’s goal.

   
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