Frankfurt, Nov. 3 (Bloomberg) -- German factory orders and production probably fell in September and unemployment rose last month as Europe's largest economy struggled to grow, economists said in advance of government reports this week Orders declined 0.5 percent from the previous month and industrial production dropped 0.6 percent, according to the median forecast of economists surveyed by Bloomberg News. The number of jobless climbed by 12,500 in October, they said, and the rate probably remained at 9.8 percent.
``The third quarter was all right, but the fourth will be worse,'' said Andreas Scheuerle, an economist at DekaBank Deutsche Girozentrale in Frankfurt. ``The global economy is going down a gear and at home the economy has no power either,'' The German government on Thursday lowered its forecast for economic growth. Gross domestic product will expand about 0.5 percent this year, compared with a previous forecast of 0.75 percent. Volkswagen AG, Europe's largest carmaker, on Wednesday said third-quarter net income fell a greater-than-expected 51 percent. The U.S. economy expanded less than expected in the third quarter and consumer confidence slid to its lowest level since 1993 last month. The dollar weakened to $1 per euro for the first time in more than three months on Friday as an increase in the U.S. jobless rate heightened concern that slowing growth will curb investment in the world's biggest economy.
Germany's government will release the factory orders report on Wednesday and the production figures on Friday. The jobless figures will be published on Thursday.
European Central Bank
A slowing German economy, which is weighing on Europe, increases pressure on the European Central Bank to lower interest rates for the dozen nations sharing the euro, economists say. The ECB will reduce its benchmark rate by at least a quarter point from 3.25 percent before the end of the year, according to 13 of the 22 economists surveyed by Bloomberg News. Five forecast a cut when policy makers meet on Thursday. The implied yield on the three-month euribor interest rate futures contract due in December was 3.03 percent on Friday. In July, futures trading suggested investors predicted a rate rise.
European manufacturing shrank for a second month in October. Consumer confidence in the 12 nations using the euro dropped to an 11-month low in the same month. Bosch GmbH, the No. 2 car parts maker, on Oct. 28 said it won't reach its pretax profit goal next year because of pressure from customers to cut prices. The International Monetary Fund on Friday said it sees the German economy growing 1.75 percent next year, less than its September estimates of 2 percent expansion. Germany ``is poised for a fragile recovery,'' the IMF said. //quote.bloomberg.com