The eurozone economy performed surprisingly well in the first quarter. From Reuters:
Powerful performances by the German and French economies propelled growth in the euro zone well above forecasts in the first quarter while also highlighting the yawning gap between the bloc's strong and weak.
The 17-nation currency area expanded by 0.8 percent in the first three months of the year, data showed on Friday, fueled by startling 1.5 percent GDP growth in Germany, while the French economy grew 1.0 percent, driven in part by consumer demand...
The European Commission forecast quarter-on-quarter growth in the euro zone would slow to 0.3 percent in the second quarter and then stabilize at 0.4 percent for the next two quarters.
The countries with debt concerns showed mixed performances.
Portugal's economy shrank 0.7 percent in the first quarter, sending the economy back into recession. Its government has admitted that, having sought a bailout, its economy will shrink both this year and next. The Commission expects 2.2 percent contraction in 2011 and 1.8 percent in 2012.
Greece actually achieved quarterly growth -- of 0.8 percent -- for the first time since late 2009 but that followed a vicious 2.8 percent contraction in the last quarter of 2010.
The Commission expects Athens to announce new austerity measures this year to meet its bailout targets. It forecast the economy would shrink 3.5 percent this year if policies are unchanged, but expects 1.1 percent growth in 2012.
Spain gained some support for its efforts to persuade markets it can avoid being sucked into the debt crisis -- its economy expanded 0.8 percent on an annualized basis, its strongest rate since the second quarter of 2008. On the quarter, growth was 0.3 percent.
On Thursday, the UK economy had released somewhat-disappointing data. Again from Reuters:
A disappointing performance by industry and a rise in the number of home repossessions dealt a blow to Britain's recovery prospects on Thursday, and doused any hopes for an upgrade to first-quarter growth...
The Office for National Statistics said industrial output rose 0.3 in March after a 1.2 percent fall in February, less than half the gain forecast by economists, partly due to ongoing maintenance work in oil and gas fields...
Figures from the Council of Mortgage Lenders showed the squeeze on incomes is already having an impact on households, with home repossessions between January and March up 15 percent on the quarter. Separate data showed a 3 percent quarterly rise in court orders to repossess homes.
Also on Thursday, Bloomberg had reported mixed data from the US.
Retail sales rose in April at the slowest pace in nine months and consumer sentiment declined last week, highlighting the risks that rising gasoline prices pose for the U.S. economy.
Purchases increased 0.5 percent, the smallest gain since July, after a 0.9 percent March advance that was more than double the previous estimate, Commerce Department figures showed today in Washington. The Bloomberg Consumer Comfort Index dropped to minus 46.9 in the period to May 8, the lowest reading since March...
Applications for jobless benefits decreased 44,000 in the week ended May 7 to 434,000, Labor Department figures showed. Economists forecast 430,000 claims, according to the median estimate in a Bloomberg survey.
The producer-price index rose 0.8 percent, compared with a 0.6 percent median estimate of economists surveyed, other figures from the Labor Department showed. The so-called core measure, which excludes volatile food and energy costs, increased 0.3 percent, more than projected.
Data on Friday confirmed that overall inflation is high in the US and showed that the retail sales number in April really was not particularly impressive. Again from Bloomberg:
The cost of living in the U.S. rose in April, led by increases in food and fuel that are starting to filter through to other goods and services.
The consumer-price index increased 0.4 percent, matching the median forecast of economists surveyed by Bloomberg News and following a 0.5 percent advance in March, figures from the Labor Department showed today in Washington. Excluding food and energy, the so-called core gauge rose 0.2 percent.
Friday's data on consumer sentiment was more positive though.
The Thomson Reuters/University of Michigan preliminary consumer sentiment index rose to 72.4, a three-month high, from a final reading of 69.8 in April, the group reported today. The gauge was projected to rise to 70, according to the median forecast of 62 economists surveyed by Bloomberg.
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