Eurozone economy stuttering along as stimulus decision looms

LONDON -- The eurozone economy is stuttering along.

That's the conclusion from economic reports Thursday that are likely to cement expectations that the European Central Bank will bolster its stimulus efforts in a week's time.

See Full Article

Financial information company Markit said its main gauge of business activity across the 19-country single currency bloc showed growth faltering for the second straight month. The so-called purchasing managers' index slipped to 53.0 points in February from 53.6 the month before.

Though the February rate was higher than the 52.7 initial estimate and remains above the 50 level that marks the threshold between expansion and contraction, it points to muted growth, particularly in France, the eurozone's second-largest economy. Markit estimates growth in the first quarter of this year could ease from the already "meagre" quarterly rate of 0.3 per cent at the end of 2015.

"The slowdown in growth of business activity, accompanied by a similar easing in the pace of job creation and the steepest fall in prices charged for a year, suggest that the region's recovery is losing momentum," Williamson said.

"The broad-based disappointment ups the odds of the ECB acting aggressively to avoid another downturn," he added.

Separate figures from the European Union's statistics agency, Eurostat, showed retail sales in the region grew by a monthly rate of 0.4 per cent in January. It's a modest uptick and provides further evidence that the region's consumers won't be driving economic activity enough to quickly reduce the region's unemployment rate, which is still high at 10.3 per cent despite consistent falls over the past two years.

Neither the survey from Markit nor the Eurostat data are likely to ease concerns much about too-low inflation, which is ostensibly the ECB's main concern. Figures this week showed the eurozone's annual inflation rate fell below zero in February, to negative 0.2 per cent, way short of the ECB's target of just below 2 per cent.

ECB President Mario Draghi has consistently hinted at further measures over the past few weeks and the markets now expect some bold action at the central bank's meeting on March 10. Measures being touted include a further cut into negative territory of the rate the ECB pays banks on their deposits at the central bank. It currently stands at minus 0.3 per cent, meaning banks have to pay to keep money at the ECB.

By keeping interest rates low and pumping money into the economy via its bond-buying program worth over a trillion euros, the ECB is hoping to generate enough economic activity to get prices rising.

The great concern is that the clouds over the eurozone, as well as over the global economy as a whole, have darkened over the past couple of months, largely because of unease over the economic slowdown in China.



Advertisements

Latest Economic News

  • Asian stocks rise after Wall Street gain

    Economic CTV News
    BEIJING - Asian stocks rose Wednesday after Wall Street hit new highs ahead of the two-day U.S. break for the Thanksgiving holiday. KEEPING SCORE: The Shanghai Composite Index rose 0.5 per cent to 3,427.66 and Tokyo's Nikkei 225 gained 0.7 per cent to 22,579.18. Source
  • Uber admits covering up 2016 hack that affected millions

    Economic CBC News
    Uber is coming clean about its coverup of a year-old hacking attack that stole personal information about more than 57 million of the beleaguered ride-hailing service's customers and drivers. The revelation Tuesday marks the latest stain on Uber's reputation. Source
  • Uber reveals coverup of hack affecting 57M riders worldwide

    Economic CTV News
    SAN FRANCISCO - Uber is coming clean about its coverup of a year-old hacking attack that stole personal information about more than 57 million of the beleaguered ride-hailing service's customers and drivers. The revelation Tuesday marks the latest stain on Uber's reputation. Source
  • Cheesecake Factory opens 1st Canadian location in Toronto

    Economic CTV News
    TORONTO - Sweet treat lovers near Toronto can now have their cheesecake and eat it too with the opening of Canada's first Cheesecake Factory location today. The U.S. restaurant chain, which serves dozens of different kinds of desserts, announced earlier this year that it would bring its restaurant to Toronto's Yorkdale Shopping Centre in the fall. Source
  • Meg Whitman steps down as HP Enterprise CEO

    Economic CBC News
    Meg Whitman is stepping down as the CEO of Hewlett Packard Enterprise. She'll be replaced by Antonio Neri, the company's president. Whitman became CEO of the former Hewlett-Packard Co. in 2011. That company split into two in 2015, with Whitman taking helm of HPE, which is focused on selling data-centre hardware and other commercial tech gear to other big organizations. Source
  • TransCanada says Keystone oil leak was a sudden, 'immediate' event

    Economic CTV News
    BRITTON, S.D. -- A TransCanada Corp. official says he believes an estimated 210,000-gallon oil leak discovered last week in South Dakota from the Keystone pipeline was a sudden and "immediate" event. The American News reports that Erik Tatarchuk, a TransCanada vice-president, said at a Marshall County Commission meeting Tuesday that it is unlikely oil leaked long enough to soak into the soil. Source
  • Canada 'prepared for the worst' amid squabbles over NAFTA, Freeland says

    Economic CBC News
    Despite making progress on "bread and butter" issues, Foreign Affairs Minister Chrystia Freeland said differences remain between Canada and the U.S. on a number of key chapters of the North American Free Trade Agreement (NAFTA). Speaking to reporters as the fifth round of negotiations concluded in Mexico City, the Toronto-area minister said "significant" sticking points include the U.S. Source
  • TTC CEO Andy Byford leaving Toronto to head up New York City Transit

    Economic CTV News
    TORONTO -- The chief executive officer of Toronto's transit agency is leaving his post to take a job as president and CEO of New York City Transit. Andy Byford -- who announced his resignation Tuesday, six years after joining the Toronto Transit Commission -- will remain on the job until Dec. Source
  • NAFTA: Deadlock on hard issues as round concludes

    Economic CTV News
    MEXICO CITY -- Another round of NAFTA talks wrapped up with all key issues still deadlocked Tuesday as negotiators prepared to leave Mexico City with a plethora of question marks lingering over the trade deal. Source
  • Shareholders urge TransCanada to back Keystone XL despite risk

    Economic CBC News
    TransCanada Corp. should push ahead with a $10-billion Keystone XL pipeline expansion after the state of Nebraska on Monday approved a route that would raise the cost of the controversial project, some shareholders said. The approval quashed the last regulatory hurdle for the nearly decade-old project, but the Nebraska Public Service Commission denied TransCanada's preferred route. Source