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Eurozone Economic Confidence Falls Unexpectedly

Eurozone economic confidence weakened unexpectedly in June from a 34-month high in May, survey results from European Commission showed Friday.

The economic sentiment index fell to 102 in June from revised 102.6 in May. It was forecast to rise to 103. The decline resulted from a deterioration in industry, construction and, to a lesser extent, consumer confidence.

Consumer confidence slid in June owing to more cautious assessments of future unemployment and future savings, which were only partly offset by a moderate improvement in consumers' expected financial situation. Consumer confidence came in at -7.5 in June, down from the flash estimate of -7.4 and -7.1 in May.

Likewise, industrial confidence fell to -4.3 from -3.1 in the prior month. The weakening industry confidence was caused by managers' more careful views on expected production, the current level of overall order books and the stocks of finished products.

Retailers' sentiment, meanwhile, improved to -2.1 in June from -2.4 in May. The improvement reflects a perceived greater adequacy of the volume of stocks and managers' higher satisfaction with the present business situation, which contrasted with more pessimistic views on the expected business situation.

Services confidence improved to 4.2 in June from 3.8 in May. The slight improvement in services confidence was propelled by managers' significantly brighter demand expectations.

Confidence in construction deteriorated to -31.8 from -30.1 a month ago. The decline in construction confidence was fueled by downward revisions in employment expectations. The assessment of the level of order books, by contrast, was broadly unchanged compared to last month.

Business confidence fell by 0.14 points to 0.22 in June, when it was forecast to rise to 0.4. Managers' evaluation of all five components deteriorated in June.

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