Business morale in the euro zone hit a historic high in December and the jobless rate slid further in November with monthly producer prices holding flat, data showed this morning, pointing to a healthy economic growth.
The business climate indicator for the euro zone rose to 1.60, its highest ever level, from 1.55 in November, the European Commission said.
A separate economic sentiment indicator fell slightly to 110.1 in December, but still stood well above its long-term average, the Commission said.
Also on Friday, European Union statistical agency Eurostat said the seasonally adjusted unemployment rate in the euro zone fell to 7.6 per cent in November from 7.7 per cent in October, reflecting stronger labour markets in France and Germany.
Industrial producer prices in the euro zone remained unchanged in November from the previous month, capped by falling energy prices, but rose 4.3 per cent year-on-year, boosted the rises in oil and commodities earlier in 2006, Eurostat said.
High prices at factory gates may translate into consumer inflation and prompt the European Central Bank to raise interest rates. The ECB has increased borrowing costs six times since December 2005 and is expected to hike rates again in March.
In another release, Eurostat said the euro zone retail sales rose 1.3 per cent in November from the same month in 2005. The indicator grew 0.5 per cent in month-on-month terms.
The data appeared to confirm healthy economic growth in the last quarter of 2006 and a possible slight slow-down in 2007.
"This points to sustained production growth in the fourth quarter of 2006," the European Commission said about the business climate indicator. But it noted that industry managers' production expectations for the months ahead decreased.
The Commission has previously said it expects euro zone gross domestic product to grow 2.6 per cent in 2006, slowing to about 2.1 per cent in 2007.
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