Europeans more and more enthusiastic about the future of the economy

According to a monthly survey by the European Commission, euro zone economic sentiment improved more than expected in June, especially among consumers and service providers, as hopes increased the economic crisis may be easing.

Economic sentiment in the 16 countries using the euro raised to 73.3 points in June from 70.2 in May, the third improvement from a rough of 64.6 points in March, the data showed on Monday. While analysts polled by Reuters had expected an increase to 70.8 points. The Commission, executive arm of the 27-country European Union, revised its May sentiment reading up from 69.3.

Besides, the survey confirmed deflationary pressure in the euro zone. Inflation expectations 12 months ahead among households dropped again in June to set a new low of -9 points from a downwardly revised -8 points in May, marking the third consecutive month of expectations of dropping prices. However, selling-price expectations among manufacturers rose to -11 from May's -12.

The European Central Bank watches inflation expectations closely in its policy decisions, aiming to anchor them at its price stability target of inflation just below 2 percent over the medium term. With inflation moving to negative territory and recession persisting, the ECB has cut its main rate to a record low of 1.0 percent.

In addition, the Commission said its business climate indicator rose more than expected to -2.97 in June from a revised -3.11 for May, though the level remained low, suggesting weak production. Economists polled by Reuters had expected the indicator to come in at -3.00.

The Conference Board research group said earlier on Monday that its leading economic index for the euro zone increased 1.9 percent to 95.4 points in May, suggesting the currency area's economy may reach the lowest point.