European economy accelerates in second quarter

European economic growth turned out surprisingly strong in the second quarter. Reuters reports:

European economic growth accelerated sharply in the second quarter of 2010 as Germany's best performance since reunification more than made up for the struggles of Spain, Ireland and recession-ravaged Greece.

A forecast-beating surge in German gross domestic product combined with a solid if less impressive rise in France to push the aggregate GDP growth rate of the 16-country euro zone to 1.0 percent from the previous quarter and past that of the United States, which is showing signs of flagging.

US data on Friday were relatively mixed. Bloomberg reports:

Sales at U.S. retailers rose less than forecast and consumer confidence held near an eight-month low, indicating the economic slowdown will persist into the second half of 2010.

Purchases in July climbed 0.4 percent, led by autos and gasoline, figures from the Commerce Department in Washington showed today. A preliminary sentiment index for August rose to 69.6 from 67.8 the prior month, according to data from Thomson Reuters/University of Michigan...

Excluding autos, gasoline and building materials, which are the figures used in calculating gross domestic product, sales dropped 0.1 percent in July after a 0.3 percent rise the prior month...

The consumer-price index increased 0.3 percent, the most in a year and exceeding the 0.2 percent gain projected by the median forecast of economists surveyed. A gauge excluding volatile food and fuel costs, the so-called core rate, increased 0.1 percent, as projected...

Another report today showed inventories climbed in June, led by gains at retailers that indicate companies may need to cut prices to clear out merchandise as demand slows. The 0.3 percent increase in the value of business stockpiles followed a revised 0.2 percent rise in May, the Commerce Department said.