Show me the growth!! European markets yell today

09/20/2012 2:10 pm EST


Jim Jubak

Founder and Editor,

Global financial markets got a reminder today that the European Central Bank’s plans to support Spanish and Italian government bonds don’t address the lack of economic growth in the EuroZone.

Markit Economics flash Purchasing Managers Index (PMI) for September fell to 45.9 from 46.3 for the EuroZone. That took the index to its lowest level in more than three years and was worse that the 46.6 reading expected by economists. (In this index a reading of 50 marks the divide between a growing and contracting economy. So today’s 45.9 number shows a relatively serious economic contraction in the EuroZone.) A decline of this dimension translates into a quarterly drop in GDP of about 0.4% for the third quarter. That too would be worse than expected and worse than the 0.2% decline in the second quarter.

The PMI sub-indexes didn’t inspire any more confidence. The manufacturing index did climb to 46.0 from 45.1, but that still puts manufacturing activity in a severe decline. In Germany the PMI showed that economic activity is still falling even through the index climbed to 49.7 in September from 47 in August. In France, the EuroZone’s second largest economy, the PMI fell hard to 44.1 in September from 48 in August. That’s bad news for a French government that has been trying to come up with an economic program that honors promises to cut the budget deficit AND that adds to economic growth.
  By clicking submit, you agree to our privacy policy & terms of service.

Related Articles on STOCKS

Keyword Image
Cognizant: From AI to IT
2 hours ago

Cognizant Technology Solutions (CTSH) began operations in 1994 as an in-house technology development...

Keyword Image
Walgreens: Value or Trap?
2 hours ago

Walgreens Boots Alliance (WBA) was on a nice run when we bought in back in October. But that all cha...