The deepening debt crisis in the euro zone has lowered European consumer and business confidence in past months, increased unemployment and raised the risk of a region-wide recession. Updated figures due to be released in the week ahead will show how Europe is faring.
On August 30th, the European Commission will publish August figures measuring consumer and business sentiment in the region.
In July, economic sentiment declined for a fourth straight month in the 17-country euro zone and dipped to its lowest point since February in the 27-country EU. Greece, Cyprus and Portugal generated the lowest scores for the month. Confidence also dropped sharply in Germany and France.
Confidence among consumers and businesses dropped in all sectors calculated in the Economic Sentiment Indicator last month.
July unemployment rates will show whether the pessimism was justified. Eurostat will release figures for the euro zone and the EU on August 31st.
Unemployment, especially among young people and in countries struggling with sovereign debt, has reflected the contraction of GDP in the second quarter.
In June, unemployment was 11.2% in the euro zone and 10.4% in the EU. That was about the same as the month before, but up about one percentage point from a year earlier.
Spain reported the highest unemployment in June with 24.8%, followed by Greece with 22.5%. The countries with the lowest unemployment rates were Austria (4.5%), the Netherlands (5.1%) and Germany (5.4%). Germany also reported the lowest youth unemployment, which was 7.9% compared with more than 22% across the euro zone and the EU.
US central bankers meet in Wyoming
The US Federal Reserve Bank of Kansas City begins its annual economic policy symposium in Jackson Hole, Wyoming on August 30th. The event is a forum for central bankers, policy experts and academics to focus on emerging issues and trends.
Economists and investors will be watching for news on monetary stimulus plans. For the past four years, the Fed has kept interest rates low in an effort to prop up the US economy. More recently, as sluggishness has continued, the Fed has considered more bond purchases.
Fed Chairman Ben Bernanke has told lawmakers that the central bank is prepared to take further action if the European debt crisis continues to threaten the US economy.
The discussion in Jackson Hole will come days after data on US consumer confidence and GDP are released.
On Tuesday, The Conference Board is scheduled to release August consumer confidence figures. The Conference Board Consumer Confidence Index, which declined in June, improved slightly in July.
“Given the current economic environment – in particular the weak labour market – consumer confidence is not likely to gain any significant momentum in the coming months,” Lynn Franco, director of Economic Indicators at The Conference Board, said in a statement last month.
On August 29th, the US Bureau of Economic Analysis will release its second estimate of second-quarter GDP figures, which consist of purchases of domestically produced goods and services by individuals, businesses, foreigners and government entities. The first estimate of second-quarter GDP released at the end of July said the US economy grew at an annual rate of 1.5%.
- The joint US Financial Accounting Standards Board (FASB)/International Accounting Standards Board (IASB) accounting for financial instruments project will occupy part of FASB’s agenda Wednesday morning.
In addition to classification and measurement, FASB will discuss impairment of financial instruments. The board’s re-evaluation of certain items in the project has frustrated IASB Chairman Hans Hoogervorst, who is eager to move forward. The IASB is not meeting this month.
FASB also will discuss projects on investment companies and consolidation policy and procedure. A webcast will be available on FASB’s website.
- The US Governmental Accounting Standards Board (GASB), meanwhile, is scheduled to meet Wednesday through Friday to review or deliberate on:
Recognition and measurement approaches associated with its conceptual framework.
Issues associated with government combinations and disposal of government operations.
Fair value measurement and application topics.
Issues associated with financial projections in relation to economic condition reporting.
Accounting and financial issues associated with post-employment benefits that are not administered through trusts or equivalent arrangements.
Issues associated with the reconsideration of the current GAAP hierarchy structure.
The proposed technical plan for the final four months of 2012.
Visitors can register on the GASB website to attend the GASB meetings in person in Norwalk, Connecticut.
—From CGMA Magazine staff reports.