The European Union on Tuesday cut its economic growth forecasts for the region, saying rising geopolitical risks in Ukraine and the Middle East and a broader global slowdown have eroded business and consumer confidence since the spring.
The downgraded outlook is bad news for the U.S. economy because Europe is a major market for American exports.
Europe's troubles come amid weaker economic growth elsewhere in the world, which helped drive up the U.S. trade deficit in September.
The Commerce Department reported Tuesday that U.S. exports dropped by about $3 billion, or 1.5%, to $195.6 billion, from August.
The decrease caused the nation's trade deficit to rise by 7.6% to $43 billion, the largest gap since May.
The economy in the 18-nation Eurozone, the area that uses the euro currency, is forecast to expand just 0.8% this year and 1.1% next year, according to the latest estimate from the European Commission, the region's executive body.
Those figures are down from a spring forecast of 1.2% growth this year and 1.7% next year.
The outlook is better for the broader 28-nation European Union, which includes the United Kingdom, but still was downgraded from the spring.
The EU economy is expected to expand 1.3% this year and 1.5% next year. The spring forecast called for 1.6% growth this year and 2% next year.
The economic and employment situation is not improving fast enough, said Jyrki Katainen, the commission's vice president for jobs, growth, investment and competitiveness.
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European Union cuts economic growth forecast amid global tensions