Eurozone recovery gathering momentum

First Posted: 10/3/2013

(AP) Another round of eurozone economic data Thursday provided compelling evidence that the currency bloc’s recovery from recession has become broad-based and self-sustaining.

Particularly encouraging was the news that retail sales across the 17 European Union countries that use the euro rose by a forecast-busting 0.7 percent in August, according to Eurostat, the EU’s statistics office.

That added to the previous month’s 0.5 percent increase itself revised higher and was above market expectations for a more modest 0.2 percent increase.

Retail sales are an important barometer of economic confidence as they show that consumers are more willing to spend rather than save for a rainy day.

The figures came on the heels of a closely-watched survey finding economic output across the eurozone rose in September at its fastest pace since the summer of 2011.

Financial information company Markit said its composite purchasing managers index a broad gauge of business activity across the manufacturing and services sectors rose to a 27-month high of 52.2 points in September. The increase from 51.5 in August takes the index further above the 50 threshold that indicates expansion.

Thursday’s surveys are the latest in a string of indicators to suggest the eurozone economic recovery is gathering momentum. Earlier this week, Eurostat figures showed the number of unemployed fell for the third consecutive month in August, though the rate held steady.

In the second quarter, the eurozone economy grew by a quarterly rate of 0.3 percent, following a run of six straight quarterly declines, which marked the longest recession since the euro currency was launched in 1999.

The improving economic signs also help explain why the European Central Bank opted against doing anything more to shore up the recovery at Wednesday’s policy meeting.