Europe Economy

Euro zone sentiment eases more than expected in August

Share
Key Points
  • Euro zone economic sentiment eased more than expected in August from a record high in July, hit by a sharp drop in optimism in France and the Netherlands.
  • The European Commission's economic sentiment index, released on Monday, eased to 117.5 in August from an all-time high of 119.0 in July.
  • Optimism deteriorated in all major sectors.
View of an almost deserted city center on December 15, 2020 in Amsterdam, Netherlands.
Niels Wenstedt | BSR Agency | Getty Images News | Getty Images

Euro zone economic sentiment eased more than expected in August from a record high in July, hit by a sharp drop in optimism in France and the Netherlands, while selling price expectations peaked.

The European Commission's economic sentiment index, released on Monday, eased to 117.5 in August from an all-time high of 119.0 in July. Optimism deteriorated in all major sectors — in industry to 13.7 from 14.5, in services to 16.8 from 18.9 and among consumers to -5.3 from -4.4.

Still, selling price expectations in industry, heralding likely future inflationary pressures, hit a record in August.

Also among consumers, inflation expectations rose to 31.1 in August from 30.0 in July, though they were still well below the all-time high of 38.7 from 2001.

Hiring plans in construction, retail trade and services drove employment expectations higher by 1.2 points to 112.8 in the euro zone, its highest level since November 2018.

Overall, France recorded the sharpest drop of economic sentiment of 4.5 points, followed by the Netherlands. Italy and Spain were also weaker. Sentiment in the biggest euro zone economy, Germany, eased only slightly by 0.3 points.