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The Eurozone’s economy is crawling slower than anyone wanted in Q2 2024. GDP went up by just 0.2%, missing the 0.3% Eurostat initially reported. Trade and government spending did their bit, but investment was a no-show, dragging down growth. Private consumption, which was supposed to help the region recover, stayed weak. Even with inflation easing up, more income, and a solid job market, people just didn’t spend as much as expected. Germany, the Eurozone’s biggest economy, is dragging everyone else down. Its output shrank in the second quarter, mainly because of weakness in the manufacturing sector, which has been struggling for a while.  Industry data from July showed that production dropped more than expected. France is in the same boat, with its industry also struggling to stay above water. This isn’t good news for the European Central Bank (ECB). They’re already on the hook to cut interest rates again soon. With things moving this slow, the ECB is under pressure to keep the region from sinking further.  They’ve already cut rates once in June, and they’re likely to do it again next week, according to analysts. No one’s quite sure when to stop the cuts, though. Some officials think holding off too long will do more damage. The unemployment rate in the Eurozone dropped to 6.4%, the lowest since the euro showed up. About 500,000 new jobs popped up in the first quarter of 2024. And it looks like this trend might continue, helped by better wages and more confidence from consumers. ECB headquarters in Frankfurt, Germany Core inflation, which strips out stuff like energy and food, held steady at 2.9%. Services inflation? That’s sitting at 4.1%, which is still pretty high and making the ECB’s job a bit trickier.  On the fiscal side, things are looking slightly better. The…

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Filed under: News - @ September 7, 2024 11:26 pm