Europe….

Expectations for 2014 may need to be tempered against a weak/weakening Eurozone.  Up until today’s flash Markit PMI, European economic fundamentals have weakened considerably since the summer.  But even the positive flash PMI data is nothing to write home about:

From the Markit report:“On the downside, the PMI is signalling a mere 0.2% expansion of GDP in the fourth quarter, suggesting the recovery remains both weak and fragile.  “The upturn is also uneven. Growth is concentrated in manufacturing, where rising exports have helped push growth of the sector to the fastest for two and a half years, while weak domestic demand led to a further slowing in service sector growth.

How much of the December (flash) recovery in the Euro PMI is due to a bounce back in exports from weak Q3 data is unknown (e.g. seasonally unadjusted German data):

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Retail sales fell in October and on year ago levels, capping a recovery that started in late 2012 and stalled more or less since the summer.  

GDP rose a meagre 0.1% in Q3 on Q2 and fell by 0.4% on the year before (Euro Area 17). 

Unemployment remains elevated at 12.1% in the Euro Area 17.

Industrial producer prices have barely budged for the last 2 years and have fallen 1.4% over the last year.

Loans to non financial companies and consumers remains negative (non financial) to marginally positive (consumers, but attributed to residential mortgage) – the rise and then the dip in consumer credit during 2013 also reflects the mild recovery and subsequent deterioration in data.

Industrial production in October fell 1.1%, in the Euro area, and, like retail sales, the earlier recovery in output seems to have stalled during the summer months. 

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Also

http://epp.eurostat.ec.europa.eu/portal/page/portal/euroindicators/peeis

Macroeconomic Imbalances scorecard

Wage-led growth for Europe? Consequences of wage competition between European countries

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