Despite all of the happy talk emanating from Brussels and repeated by the mainstream media, Europe is nowhere near a recovery. In fact, figures show that the Eurozone recession continues to deepen in contradiction to the consensus of economists who see growth right around the corner later in the year.
Eurozone unemployment hit a record of 12% in February with January’s 11.9% initial figure being revised upward:
Rising unemployment will continue to sap demand resulting in persistent Eurozone economic weakness.
Germany was formerly the only bright spot in Europe, but it is feeling the effects of weak demand from its southern neighbors. German manufacturing PMI dropped below 50 in March indicating contraction:
Indeed, only France saw an increase in PMI in March, and it is still well within contractionary range.
All of this was viewed as good news by the investment community as the ongoing weakness in the Eurozone may push the ECB to cut rates a quarter point at its next meeting:
Just like you shouldn’t fight the Fed, you should probably not fight the ECB either.