Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19
Online Grocery Shopping Will Go Mainstream as Soon as This Year - 17th April 19
America Dancing On The Crumbling Precipice - 17th April 19
Watch The Financial Sector For The Next Stock Market Topping Pattern - 17th April 19
How Central Bank Gold Buying is Undermining the US Dollar - 17th April 19
Income-Generating Business - 17th April 19
INSOMNIA 64 Birmingham NEC Car Parking Info - 17th April 19
Trump May Regret His Fed Takeover Attempt - 16th April 19
Downside Risk in Gold & Gold Stocks - 16th April 19
Stock Market Melt-Up or Roll Over?…A Look At Two Scenarios - 16th April 19
Is the Stock Market Making a Head and Shoulders Topping Pattern? - 16th April 19
Will Powell’s Dovish Turn Support Gold? - 15th April 19
If History Is Any Indication, Stocks Should Rally Until the Fall of 2020 - 15th April 19
Stocks Get Closer to Last Year’s Record High - 15th April 19
Oil Price May Be Setup For A Move Back to $50 - 15th April 19
Stock Market Ready For A Pause! - 15th April 19
Shopping for Bargain Souvenirs in Fethiye Tuesday Market - Turkey Holidays 2019 - 15th April 19
From US-Sino Talks to New Trade Wars, Weakening Global Economic Prospects - 14th April 19
Stock Market Indexes Race For The New All-Time High - 14th April 19
Why Gold Price Will “Just Explode… in the Blink of an Eye” - 14th April 19
Palladium, Darling of the PGEs, Shifting into High Gear - 13th April 19
MMT is a spectacularly Dem idea - 13th April 19
The 'Silver Lines' of Opportunity - 13th April 19
Gold Stocks Bull Market Breakout Potential - 13th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Eurozone Panic! Steepest Economic Contraction Since June 2009, Global Recession

Economics / Recession 2012 Sep 21, 2012 - 04:34 AM GMT

By: Mike_Shedlock

Economics

Best Financial Markets Analysis ArticleThe global recession which started in Europe, is strengthening led by further declines in the eurozone. Markit reports Eurozone sees steepest contraction since June 2009 despite downturn easing in Germany.


Key Points

  • Flash Eurozone PMI Composite Output Index at 45.9 (46.3 in August). 39-month low.
  • Flash Eurozone Services PMI Activity Index at 46.0 (47.2 in August). 38-month low.
  • Flash Eurozone Manufacturing PMI at 46.0 45.1 in August). Six-month high.
  • Flash Eurozone Manufacturing PMI Output Index at 45.5 (44.4 in August). Five-month high.

The Markit Eurozone PMI® Composite Output

Index fell from 46.3 in August to 45.9 in September, according to the preliminary 'flash' reading, based on around 85% of usual monthly replies. The index therefore signalled that the private sector economy contracted for the twelfth time in the past 13 months, with the rate of decline accelerating slightly to reach the fastest since June 2009.

The September reading rounds of the weakest quarter since the second quarter of 2009, with the average PMI reading for the third quarter at 46.2, down from an average of 46.4 in the second quarter.

Markit (Flash) Eurozone PMI and GDP

Markit (Flash) Eurozone PMI and GDP

Manufacturing and services saw similarly steep rates of decline in September. However, while manufacturing output fell at the slowest rate since April, the service sector saw the largest drop in activity since July 2009. The faster rate of decline in output reflected an accelerated rate of loss of new business - the largest monthly fall since May 2009.

France saw output and new orders both fall at the fastest rates since April 2009, with rates of decline accelerating markedly in both manufacturing and services.

Employment fell for the ninth consecutive month across the Eurozone, dropping at the fastest rate since January 2010. The rate of job losses in services was the highest since November 2009 and steeper than the cut seen in manufacturing, which was the lowest for five months.

While only a marginal fall in employment was seen in Germany, French payroll numbers were cut at the fastest rate since November 2009, and elsewhere across the region employment showed the largest monthly fall since July 2009.

Unwarranted Hope

Markit senior economist Chris Williamson was hoping moves by the ECB would spur confidence: "We had hoped that the news regarding the ECB's intervention to alleviate the debt crisis would have lifted business confidence, but instead sentiment appears to have taken a turn for the worse, with businesses the most gloomy since early-2009 due to ongoing headwinds from slower global growth.

This gloom is clearly reflected in headcounts falling at the fastest rate since January 2010 as companies seek to adjust to weaker demand."

The recent moves by the ECB and Fed were hardly confidence-inspiring. Rather, they were a sign of Panic!

Things are deteriorating rapidly, more austerity is coming to Spain and Italy. France is hiking taxes and fees like mad, as well as considering plans to prohibit businesses fire employees, and economists are expecting or hoping interest rate cuts will inspire confidence!

Economists Can Neither Think Nor See

Not only are such economists unable to think, they cannot even see what 20 years of monetary and fiscal stimulus did for Japanese "confidence", which is to say nothing at all. However, lower interest rates and fiscal stimulus did leave Japan a confidence-eroding mountain of debt in its wake.

Japan is now hooked on low interest rates, a mere rise of one percentage point would consume all revenues. Is that supposed to inspire confidence?

Nonetheless, Bernanke and Draghi have vowed to keep doing what they are doing until it works, and economists are hoping it will. It's pure insanity.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

© 2012 Mike Shedlock, All Rights Reserved.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules