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Rise in Eurozone sentiment does not alter weak outlook – Capital Economics
FXstreet.com (Barcelona) - Jonathan Loynes, Chief European
Economist at Capital Economics notes that this morning´s batch of
eurozone data presents a fairly downbeat picture of activity and
sentiment in the region towards the end of last year.
He writes, "Admittedly, December's rise in the main Economic Sentiment Indicator ( ESI ) of the EC's monthly business and consumer survey from 85.7 to 87.0 was a bit bigger than expected (consensus 86.5) and meant that the index has risen in two consecutive months for the first time since last January."
However, he notes that the previous pick-up was quickly reversed and, even after the latest increases, the ESI is still consistent with annual contractions in the euro-zone economy of about 2% - way below the consensus forecast of roughly flat GDP in 2013. Meanwhile, although the 113k rise in euro-zone unemployment in November was a bit smaller than those in the last couple of months, it still pushed the unemployment rate up to another record high of 11.8%. Spain's rate rose again from 26.2 to 26.6. Finally, the 0.1% monthly rise in retail sales in November left sales still down by 2.6% over the last year.
He finishes by writing, "Overall, another reminder that, while the lull in the debt crisis has continued, the euro-zone's economic outlook remains very weak."