The European Commission said on Monday that economic sentiment in the 18 countries sharing the euro fell to 99.9 this month from 100.6 in August. Economists polled by Reuters had expected a decline to 100.0.
The index was weighed down by less optimistic consumers, retailers and industry. The only sectors where sentiment improved slightly in September were services and construction.
The declining optimism was mirrored by a fall in the business climate indicator for the euro zone, which the Commission said stood at 0.07 in September, down from 0.16 in August, the lowest level since October 2013.
Consumer inflation expectations, measured as anticipated consumer price trends over the next 12 months, fell to 4.0 this month from 6.6 in August, continuing a steady decline since December 2013, when they stood at 15.1.
Selling price expectations among manufacturers, the equivalent of producer price inflation expectations, also fell to -1.8 from -0.7 in August.
The declining inflation expectations underline the very low inflationary pressures in the stagnating euro zone economy that the European Central Bank wants to prevent from turning into deflation by flooding the market with ultra-cheap cash.