The 1% YoY inflation rate was the highest since Feb. 2009. No breakdown is available yet but comps with weak early 2009 food and energy prices are the likely culprits.

The rate of unemployment, meanwhile, rose to 10% in December from a revised 9.9% in November. But the figure was below expectations, indicating that although businesses continue to cut costs, they are doing so at a slower rate.

While that was the highest rate since August 1998, Eurostat had originally reported the November rate was 10%.(…)

The country breakdown of the Eurostat survey shows that unemployment was stable in the two largest economies. The German rate was unchanged at 7.5%, while in France it also held steady at 10%. Italy, however, reported a two percentage point increase to 8.5%. In Spain, the rate edged up to 19.5% in December from 19.4% a month earlier, Eurostat said.

In the euro zone, the number of people without jobs rose only a little to 15.763 million, while the number of people in the 27-member EU without jobs rose marginally to 23.012 million.

Full WSJ article


Euro-Zone Factory Orders Rebound

(…) The European Union’s statistics agency, Eurostat, said Friday that new industrial orders rose 1.6% in November from October, but were down 1.5% from November 2008.

In October, new orders fell by a surprisingly large 1.9%, breaking a series of monthly gains and raising doubts about the sustainability of the recovery in euro-zone industry. Eurostat had previously calculated that October orders fell 2.2%.(…)

The Eurostat data showed a broad-based rise in new orders in November, led by a 1.8% increase in orders for intermediate goods, while orders for nondurable consumer goods rose by 1.2% and those for durable consumer goods were up 0.3%. However, orders for capital goods fell by 1.2%, having dropped by 4.9% in October.

Excluding volatile orders for heavy-transport equipment such as aircraft and railway engines and carriages, new orders rose 1.5% from October. Among the larger euro-zone members, Italy reported the largest pickup in new orders, a 4.7% rise, while French industry saw orders drop by 0.4%.

In the 27-member EU, new orders rose 1.8% from October, and fell by 2.0% from November 2008.

Full WSJ article, chart from Haver Analytics


Euro-Zone Economic Expansion Slows

According to data provider Markit, the flash composite purchasing managers index for the euro zone fell to 53.6 in January from 54.2 in December. That reflected a decline to 52.3 in the services sector index from December’s 26-month high of 53.6, although the measure for the manufacturing sector increased to 52.0 from 51.6 a month earlier, its strongest performance for 22 months.(…)

But despite January’s decline in activity, firms remained confident about future demand, with the services sector business expectations index jumping to 68.2 from December’s 65.7. Companies also recorded the lowest level of job losses for 15 months, Markit data showed.

Chris Williamson, chief economist at Markit, said the positive news on hiring was "encouraging" and stressed that the easing in the rate of growth should be put in the context of the adverse weather that affected many businesses during the month.

Separate PMI surveys showed that the euro-zone index reflected a steady performance in Germany, where the manufacturing sector picked up strongly, although the services sector fell back. In France, the composite index eased back a little but remained close to 60, representing healthy economic growth.(…)

Full WSJ article


German Producer Prices Unexpectedly Fall

German producer prices fell 0.1% in December from November and were down 5.2% from a year earlier, the Federal Statistics Office, Destatis, said Wednesday. (…)

However, core inflationary pressures also weakened sharply due to a sharp drop in orders and capacity utilization. Prices for intermediate goods were down 3.6% from a year earlier, despite rising 0.2% on the month. Prices for consumer goods were unchanged from November and were down 1.1% on the year.

Full WSJ article


Eurozone Unemployment Hits 10%

Unemployment in the eurozone breached the 10 per cent mark for the first time since the introduction of the single currency over a decade ago.

Eurozone unemployment rateDespite extraordinary measures to protect the labour market during the downturn, 4m have lost jobs across the 16 countries that use the euro, according to the European Commission’s statistical arm.

As of November, there were 15.7m jobless in the bloc, the highest since the data series was first compiled in 1994.


The psychological double-digit threshold was breached despite the smallest month-on-month growth in jobless rolls, of 102,000, since July 2008.(…)

The jobless rate has been contained by extraordinary measures that have protected the labour market, most notably the sharp rise in “short-work” schemes, where governments subsidise employers to keep workers on their payrolls through the downturn. Up to 2.4m have been involved in such schemes across the EU, according to Brussels, over half of them in Germany.

Full FT article, lower chart from WSJ



· Total Euro-Area consumer spending is down by 0.3% in November after being down in earlier months…seventeen down months in a row in fact. Over three months the pace of contraction in Euro-consumer spending remains about the same as over six months and only a bit less than over 12-months.

· Even motor vehicle registrations that had bumped up on special government assistance plans across the various Zone countries fell in off in November. German retailers continue to be hard-hit.

· Right now Europe continues to benefit from export led growth; China pushes export led growth; Japan pushes export-led growth. But for all that to work, the European consumer, and Japanese consumer will have join in. The consumer in the US appears to be back in gear, somewhat…

Haver Analytics


Euro-Zone November Retail Sales Disappoint

(…) Retail sales in the 16 countries that use the euro slumped 1.2% from October, matching the record monthly drop seen in October 2008 and 2001, the European Union’s Eurostat statistics agency said Thursday.

Sales were 4% weaker than in November 2008, the sharpest annual drop for nine months and the 18th consecutive month that sales have fallen on a year-to-year basis.(…)

Eurostat said sales of nonfood products dropped 1.6% from the previous month and 4.2% from a year earlier, following a 0.6% monthly rise and a 0.2% annual decline in October.(…)

For the 27 members of the European Union combined, retail sales volumes dropped 0.8% in November, the sharpest monthly decline since May, and were 2.1% weaker than a year earlier, Eurostat said.(…)

Full WSJ article