Cognitive Dissonance Rises in EuroZone

Eurozone Retail Sales YoY

Unemployment Continues to Climb in Euro Zone – NYTimes.com.

Euro-Area Economic Confidence Rises More Than Estimated – Bloomberg.

We have two articles summarizing the recent European economic data dump. The NYT chooses a realistic headline for its report, but financial news source BBG spins the news optimistically with its headline. While the confidence gauge did rise more than economists anticipated, the number is still comfortably within recessionary territory at 87 where a number greater than 100 would indicate an expansion.

Consumers and business leader have become inured to the ongoing Eurocrisis, and their fatigue is reflected with their increased confidence. Some people are just tired of being realistic. Even the Germans are experiencing increasing business confidence, yet the numbers do not support an improving business environment.

Europe’s unemployment rate increased .1 to 11.8%, the 15th increase in the last 20 months:

euro-area-unemployment-rate

Unemployed workers have little money to spend, so retail sales continued their trend of decreases. In the last 20 months, they have shrunk year-over-year 19 out of 20 times.

Germany, which has been keeping the Eurozone afloat, endured a 3.4% drop in exports. More significantly, its imports dropped 3.7% so the Germans will not be spurring an economic recover in the periphery anytime soon. It also saw its factory orders decrease 1.8%.

The ECB is predicting a contraction of 0.4% in the Eurozone economy. Are Europeans merely confident that it will not get worse?

 

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