- Tullia Bucco, Unicredit economist
French consumer spending dropped the most in seven months in October, while the unemployment rate rose to a new record, adding to signs that a recovery in the Euro zone's second biggest economy failed to gather steam. According to the INSEE, consumer spending declined 0.7% last month from September, the weakest level since March, driven by a 3.4% plunge in new car sales. Adding to dim data, the number of unemployed surged by 42,000 in the reported month to a total of 3.58 million. President Francois Hollande's government is hoping that the French economy can achieve growth of at least 1.5% next year, the minimum necessary to get unemployment falling.
Meanwhile, confidence in the Italian manufacturing sector continued to fade in November. The manufacturing sector confidence index declined to 104.6 in the current month, down from the revised 105.7 in October. The manufacturing PMI climbed to 54.1 last month. At the same time, the Greek economy shrank both on an annual and quarterly basis in the three months through September. Greece's third quarter GDP declined 0.9% on quarter, down from the 0.4% growth in the April-June period. In annual terms, the economy posted the same decline, after the 1.3% rise.
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