Friedrich Merz’s unprecedented failure to win election as German chancellor in the first round of voting in parliament has raised doubts about his new government’s ability to carry through on plans to push Europe’s largest economy out of stagnation.

The European Central Bank is cutting interest rates by a quarter percentage point amid signs of weakening growth and concern about the impact of political chaos in France and the possibility of new U.S. import tariffs.

A key measure of German business optimism rose in April for the seventh month in a row amid lower natural gas prices and the reopening of the Chinese economy after COVID-19 restrictions.

Europe’s largest economy is sending recession signals.

Official figures show that factory orders in Germany plummeted 7.7% in August compared with the previous month, led by much lower demand from countries outside the eurozone.

Germany’s economy has contracted more than expected in the first quarter amid coronavirus lockdown measures.

Factory production and exports increased strongly in Germany in March.

A closely watched indicator of German business outlooks barely rose in April as the third wave of coronavirus infections held back optimism about the pace of post-pandemic recovery.

German unemployment held more or less steady in February despite the impact of lockdown measures, according to official data released Tuesday. Extensive use of a short-term salary support program is still keeping the figures in check. In seasonally adjusted terms, unemployment remained at 6%, though 9,000 more people were out of work than in January, the Federal Labor Agency said. In Germany, the labor agency pays at least 60% of the salary of employees who are on reduced or zero hours. The labor agency said it paid support for 2.39 million people in December, the most recent month it has figures for.

Official statistics show that the German economy grew 0.3% in last years fourth quarter compared with the previous three-month period a better performance than first thought. (AP Photo/Martin Meissner, file)BERLIN – The German economy grew 0.3% in last year's fourth quarter compared with the previous three-month period, official data showed Wednesday — a better performance than first thought. Germany’s economy did better than several others in the 19-country eurozone as it was supported by manufacturing, which has taken less of a hit than services during the pandemic. “The construction sector, industrial activity and foreign demand helped to stop the German economy from falling into contraction during the second lockdown,” ING economist Carsten Brzeski said in a research note. “The growth drivers of the fourth quarter could easily become drags in the first,” he noted.

FRANKFURT – Business optimism in Germany rose somewhat in December but remained at depressed levels as the pandemic continues to whipsaw Europe's largest economy. The closely-watched Ifo index increased to 92.1 points from 90.9 but remains below the 92.5 from October. Manufacturing optimism rose markedly, while services companies that depend on personal contact such as tour operators, hotels and performing arts were hurting. The government ordered schools and non-essential retail and personal services businesses to close. The Ifo index is what economists call a leading indicator, meaning it gives clues to where the economy is heading in the months ahead.

The Ifo institute's index released Thursday rose to 93.4 points in September from 92.5 points in August. The index is based on a survey of thousands of businesses about their view of current conditions and expectations for the future. In this case the current assessment rose while the expectations part levelled off. Carsten Brzeski, chief eurozone economist at ING bank, said growth could rebound sharply with growth between 5% and 10% in the third quarter. But the recovery still faces hurdles and has a long way to go to regain its pre-pandemic footing.

BERLIN German factory orders surged in June, according to figures released Thursday, giving hope that Europe's largest economy is on track for a recovery from declines suffered from the coronavirus pandemic lockdown earlier in the year. Industrial orders rose by 27.9% in June over the previous month, according to figures from the Economy Ministry adjusted for seasonal and calendar factors. That was more than double the increase economists had expected, and followed an already strong 10.4% increase in May. Today's numbers suggest that the industry could catch up with the momentum in the rest of the economy, he said in a research note. Even with the surge in June, industrial orders are still down by more than 11% on the year.

FRANKFURT Germanys economy, Europe's largest, took a massive hit during the pandemic shutdowns, shrinking by 10.1% percent during the April-June period from the previous quarter as exports and business investment collapsed. It was the biggest drop since quarterly growth figures began being compiled in 1970, the official statistics agency said Thursday. The plunge far exceeded the previous worst-ever recorded performance, a fall of 4.7% in the first quarter of 2009 during the global financial crisis. The German data release comes ahead of expected figures for Italy, France and the 19-country eurozone as a whole on Friday. State statistics agency Destatis said that exports, imports, consumer spending and investment in equipment had massively collapsed during the second quarter.

Revised official figures released separately Monday showed the economy has now recorded two straight quarters of falling output, meeting a commonly used definition of recession. The Ifo institute index based on surveys of businesses rose to 79.5 from 74.2 in April, a strong increase but still far below normal. Official statistics released Monday confirmed an earlier reading that the German economy shrank by 2.2% in the first quarter of the year compared with the same period in 2019. The more detailed figures in the second release showed that private consumption and exports were the hardest hit. Figures for the second quarter should show an even deeper downturn since the first-quarter figures only captured part of the lockdowns.

NEW YORK - Investors have recently put fears about the pace of global growth aside, opting for optimism on a "phase one" US-China trade deal. Germany may post data Thursday indicating that it's in recession. Economists surveyed by Reuters believe the world's fourth largest economy shrank 0.1% between July and September marking two straight quarters of negative growth. Recession or not, the reality is that Germany's economy, the largest in Europe, looks very weak. But he's also likely to face questions on weak manufacturing and business investment data and what it tells us about the strength of the world's biggest economy.