Leading Economic Indicators euro rises 1.2 percent in September

The leading economic index for the euro zone Study Group Conference Board (LEI, for its acronym in English) rose 1.2 percent to 100.6 points in September, suggesting a continued recovery in the block single currency.

The rally came after increases of 1.8 percent in August and 1.7 percent in July, the group said in a statement Wednesday, which said seven of the eight components of the index contributed positively in the month.

"(Is) strong earnings in the last six months in the LEI in the euro zone, Germany and France point to a continuing process of recovery," he said in a statement Jean-Claude Manini, European economist at the Conference Board.

"However, current economic conditions remain weak and the continuing downward trend in employment in the euro area, combined with the purpose of incentive measures, represent the risk of an extended period of weak growth after the recovery of short term, "he said.

Unemployment in the euro zone of 16 countries grew at more than a decade from 9.6 percent in August, which affected the prospects for a solid rebound from the worst recession since World War II.

Economists expect the euro zone economy has begun to grow in the third quarter of this year.

Governments have pumped billions of euros into the economy to kick, but must end their tax breaks because their deficits have risen to levels considered dangerous.

Finance ministers of the EU agreed this month it should start no later than 2001 to make deep cuts in their budget deficits.

The leading index, which anticipates economic development for up to six months in the future, features eight economic indicators that measure the activity in the euro area as a whole.

The components include the economic sentiment index from the European Commission, the rate of residential building permits secured from Eurostat, the index of new orders for capital goods and the Dow Jones EURO STOXX.

It also includes data from the European Central Bank money supply and interest rate differentials and the index of purchasing managers by Markit Economics and manufactures its index of future business expectations of the service sector in the euro area.