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| Euro Zone Economy Continues to Expand, Survey Suggests | Euro Zone Economy Continues to Expand, Survey Suggests |
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| PARIS — The euro zone economy is continuing its steady, albeit slow, expansion, according to a private sector report Thursday that showed Germany again driving the region. | PARIS — The euro zone economy is continuing its steady, albeit slow, expansion, according to a private sector report Thursday that showed Germany again driving the region. |
| The currency bloc, made up of 18 European Union members, appears to be growing in the second quarter at the fastest pace since the same period in 2011, according to a survey of purchasing managers by Markit Economics, a data analysis firm in London. | The currency bloc, made up of 18 European Union members, appears to be growing in the second quarter at the fastest pace since the same period in 2011, according to a survey of purchasing managers by Markit Economics, a data analysis firm in London. |
| Markit’s broad purchasing managers index for May came in at 53.9, little changed from 54.0 in April. A number above 50.0 indicates expansion, while a number below that level suggests contraction. Economists consider the purchasing managers data, which are based on surveys of around 5,000 euro zone companies, to be one of the better real-time indicators of the health of the bloc’s economy. | |
| “The ongoing improvement in business conditions was evident in both manufacturing and services,” a Markit statement said. | “The ongoing improvement in business conditions was evident in both manufacturing and services,” a Markit statement said. |
| The pace of manufacturing output grew at a slower rate, it noted, partly because exports eased, but companies “across both sectors nevertheless expanded capacity to meet rising demand, collectively taking on staff at the fastest rate since September 2011.” | The pace of manufacturing output grew at a slower rate, it noted, partly because exports eased, but companies “across both sectors nevertheless expanded capacity to meet rising demand, collectively taking on staff at the fastest rate since September 2011.” |
| Any hint of improvement in the bleak labor market is good news for the roughly 26 million unemployed people in the 28-nation European Union, but the purchasing managers surveys have been showing signs of a modest hiring uptick for several months, which has not been reflected in official data. | Any hint of improvement in the bleak labor market is good news for the roughly 26 million unemployed people in the 28-nation European Union, but the purchasing managers surveys have been showing signs of a modest hiring uptick for several months, which has not been reflected in official data. |
| The euro zone jobless rate has been steady at around 11.8 percent since December, with a quarter or more of the working populations in Spain and Greece seeking employment. | The euro zone jobless rate has been steady at around 11.8 percent since December, with a quarter or more of the working populations in Spain and Greece seeking employment. |
| A separate Markit index tracking German purchasing managers came in at 56.1, unchanged from April, suggesting that Europe’s largest economy is growing smartly. That contrasted with France, where the index fell to 49.3 from 50.6 in April, suggesting the economy is weakening slightly. | A separate Markit index tracking German purchasing managers came in at 56.1, unchanged from April, suggesting that Europe’s largest economy is growing smartly. That contrasted with France, where the index fell to 49.3 from 50.6 in April, suggesting the economy is weakening slightly. |
| “The data don’t point to any meaningful change in the near term,” said Michel Martinez, chief euro zone economist at Société Générale. “The euro zone recovery is stuck in a low gear.” | |
| On the positive side, he said, there was little to suggest that the Ukraine crisis or the slowdown in China were having an impact on growth, so far. | |
| Markit’s purchasing managers’ index covering China, conducted with HSBC, suggested the Asian giant's manufacturing sector contracted for a fifth straight month, though the rate of decline slowed. That is worrying at a time when Europe is barely keeping its head above water and the United States showing unexpected weakness in the first part of the year. | |
| The gross domestic product of the euro zone grew 0.2 percent in the first three months of 2014 from the previous quarter, for a 0.8 percent annual rate, according to official data this month from Eurostat, the union’s statistics agency. | The gross domestic product of the euro zone grew 0.2 percent in the first three months of 2014 from the previous quarter, for a 0.8 percent annual rate, according to official data this month from Eurostat, the union’s statistics agency. |
| Chris Williamson, Markit’s chief economist, said in a statement that Thursday’s survey data were consistent with an acceleration in the April-June period to a 0.5 percent quarterly rate. | Chris Williamson, Markit’s chief economist, said in a statement that Thursday’s survey data were consistent with an acceleration in the April-June period to a 0.5 percent quarterly rate. |
| It is not clear whether that would be enough to stay the hand of the European Central Bank, which has been hinting lately that it intends to undertake a new round of monetary stimulus when its governing council meets on June. | It is not clear whether that would be enough to stay the hand of the European Central Bank, which has been hinting lately that it intends to undertake a new round of monetary stimulus when its governing council meets on June. |
| The European monetary authority has so far resisted the outright buying of government bonds used by the Federal Reserve, the Bank of Japan and the Bank of England to stimulate lending and stave off deflation. But many economists expect the central bank to take several measures short of that, perhaps cutting its main interest rate to nearly zero and instituting negative interest rates on banks’ cash holdings. | The European monetary authority has so far resisted the outright buying of government bonds used by the Federal Reserve, the Bank of Japan and the Bank of England to stimulate lending and stave off deflation. But many economists expect the central bank to take several measures short of that, perhaps cutting its main interest rate to nearly zero and instituting negative interest rates on banks’ cash holdings. |