What's going on?
Late last week, survey data showed that Europe largely took the (exceptionally hot) summer off. In August, things picked up slightly but growth was still pretty chilly (unlike the weather). (Tweet this.)
What does this mean?
It seems that people in countries like Italy, Spain and France took their cue from the weather and spent the summer in the sun. So the survey (compiled by asking business owners what they’ve been up to and what they’re expecting for the future) didn’t have as many respondents as usual. The answers that did come in pointed to a small increase in August business activity (though slightly less than forecast) compared to July.
Job growth looked relatively buff – which should help consumer spending (more work may mean more money to spend).
Why should I care?
For markets: Europe’s alright.
Although growth was the tortoise rather than the hare, growth’s still growth – and the data supports the European Central Bank’s plan to end quantitative easing (where it pumps cash into the economy by buying bonds) and raise interest rates next year. Investors bought European bonds, which boosted their prices and sent their yields down (when bond prices rise, yields fall).
The bigger picture: Wheels no longer Greece-d.
After eight years, the international bailout (the biggest ever) of Greece has come to an end. Last week, the country had its training wheels removed – after what’s largely been deemed a failure. Greece’s debt is nearly twice the size of its economy, which is 25% smaller than before the crisis. But the country’s economy has stabilized and, recently, grown – it now has access to international markets again (which was revoked when investors became convinced it wouldn’t be able to repay its debts). During the height of the crisis, some thought the eurozone might go down with Greece, but that doesn’t look likely these days.