Eurozone retail sales and services activity fall

Friday's data suggest that the eurozone economy will take a while to recover.

Bloomberg reports that eurozone retail sales fell in May.

Sales in the 16-nation euro region declined 0.4 percent from April, when they rose 0.1 percent, less than initially reported, the European Union’s statistics office in Luxembourg said today. Economists expected a drop of 0.1 percent, according to the median of 20 forecasts in a Bloomberg News survey. From a year earlier, sales fell 3.3 percent.

Data for June provided mixed indications. Again from Bloomberg:

A gauge of services activity in the 16-nation euro region fell to 44.7 from a seven-month high of 44.8 in May, London- based Markit Economics said today. The June reading was revised up from an initial estimate of 44.5. The index is based on a survey of purchasing managers by Markit and a reading below 50 indicates contraction...

Manufacturing shrank at the slowest pace in nine months in June, a separate report showed on July 1, adding to signs that Europe’s economy is starting to recover from the worst recession in six decades. A composite index of manufacturing and services rose to 44.6, marking the fourth month of slowing contraction.

The UK economy appears to have a better chance of returning to growth soon. From Reuters:

The dominant services sector expanded for a second month in June but the pace of recovery slowed as new business contracted and firms stepped up the pace of job cuts, a monthly survey showed on Friday. The headline PMI index eased to 51.6 from 51.7, confounding expectations for an improvement to 52.0.