Saturday, 5 November 2011

Eurozone economy shrinks

Bloomberg reports the October services and manufacturing PMI numbers for the euro area on Friday:

A euro-area composite index based on a survey of purchasing managers in both industries fell to 46.5 from 49.1 in September, London-based Markit Economics said today. That’s a 28-month low, the sharpest drop since November 2008 and below the estimate of 47.2 on Oct. 24. A reading below 50 indicates contraction...

The euro-area’s services indicator also dropped more than previously estimated in October, falling to 46.4 from 48.8 the previous month, today’s report showed. That’s the fastest pace since July 2009. The manufacturing gauge slipped to 47.1 from 48.5, indicating a contraction for a third straight month.

In another sign of the worsening economic conditions in the euro area, Germany reported on Friday that factory orders plunged 4.3 percent in September.

US economic data on Friday were somewhat more ambiguous. Non-farm payrolls increased by just 80,000 in October but the unemployment rate fell to 9.0 percent from 9.1 percent. Gains in non-farm payrolls in the prior two months were also revised up by 102,000.

Meanwhile, markets remained worried about Europe. Stocks in the US and Europe fell on Friday. The S&P 500 fell 0.6 percent while the STOXX Europe 600 fell 1.0 percent.

The yields on US and German government bonds also fell but the yield on Italy's 10-year bond rose to a euro-era high of 6.4 percent as the government asked for IMF surveillance of its debt-reduction programme even as it rejected an offer for financial assistance from the latter.

No comments:

Post a Comment