Data released on September 4 showed that real second-quarter GDP in the 17 Eurozone economies grew 0.3%, or an annualized rate of 1.2%, according to Wells Fargo Securities.
The report authors said the economy in Europe cannot be characterized as strong, but it does bring an end to the Eurozone's second recession in five year.
A breakdown of revised GDP data showed broad-based, if weak domestic demand. The Wells Fargo report showed that 2Q real consumption spending grew at an annualized rate of 0.7%. Fixed investment spending saw 1.0% growth while government spending was up 1.7%. These three categories are combined to come up with final domestic demand (FDD); 2Q FDD was up 1.0%. This makes it the first quarter to show positive FDD growth in six quarters.
The report noted that few “hard” indicators have been released for 3Q 2013, but "soft" economic indicators on the Eurozone are suggesting that the positive growth is continuing, the Wells Fargo Securities report said. It pointed to the economic sentiment index, which has been up four months in a row. The summer of 2013 also saw Eurozone consumer confidence strengthening to a two-year high level. Retailers and service sector providers are also exhibiting more confidence.
These factors, along with a slight drop in unemployment, point to a continued weak growth in Eurozone consumer spending in the coming months.
Back to Breaking News