October 31, 2017 / 11:21 AM / a year ago

RPT-Euro zone economy grows faster than expected in Q3, inflation slows in Oct

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BRUSSELS, Oct 31 (Reuters) - The euro zone economy grew faster than expected in the third quarter and unemployment fell to an almost nine-year low, but consumer inflation slowed again in October after two months of faster rises, first estimates and data showed on Tuesday.

The European Union’s statistics office Eurostat estimated that the gross domestic product of the 19 countries sharing the euro grew 0.6 percent in July-September from the previous three months and was 2.5 percent higher than in the same period of 2016.

Economists polled by Reuters had expected a 0.5 percent quarterly rise and a 2.4 percent year-on-year gain.

The economic growth helped bring down euro zone unemployment to the lowest level since January 2009, beating market expectations.

The unemployment rate fell to 8.9 percent of the workforce or 14.513 million people in September from a downwardly revised 9.0 percent, or 14.609 million, in August. Economists polled by Reuters had expected an unemployment rate of 9.0 percent.

But consumer price growth in October eased to 1.4 percent year-on-year, a Eurostat estimate showed, from 1.5 percent in the previous two months.

This was mainly because of slower growth of energy prices, which rose 3.0 percent year-on-year in October, slowing from 3.9 percent in September, offsetting equally volatile unprocessed food prices which rose 2.8 percent after 1.5 percent in September.

Measured without these two most volatile components, inflation slowed to 1.1 percent in October from 1.3 percent in September.

The European Central Bank wants to keep the headline inflation number below, but close to 2 percent over a two-year horizon and last week decided to extend its government bond buying programme that pumps cash into the banking sector, although to reduce it in size. (Reporting By Jan Strupczewski; Editing by Catherine Evans)

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