The Low Post News

Retail Sales Increase across Euro Zone

Retail sales across the common currency 18 nations of the euro zone increased in March for the third consecutive month. This is an indication that consumer spending is ready to help the region’s slow economic recovery.

In addition, on Tuesday surveys from businesses indicated the economy in the euro zone grew at its fastest pace in nearly three years during the month of April. However, service providers and manufacturers continued to lower prices.

The latest surveys showed that the growth was more balanced with Ireland and Spain expanding the quickest, and activity regaining speed in Italy and Germany.

Markit the data firm said its Purchasing Managers composite index for the euro region, which is a measure of all activity in the services and manufacturing sectors, was up from 53.1 during March to 54 in April, which was its highest point since May of 2011. An above 50 reading for the PMI indicates activity is expanding.

The acceleration in expansion at the beginning of the second quarter, with the country of Spain recording the fastest expansion it has seen in the past seven years, will provide encouragement to European Central Bank governing council members, who are meeting Thursday over policy.

The new surveys have also suggested that businesses are beginning to add jobs and that more improvements in the jobs market might be near.

However, businesses have cut their prices for a 25th consecutive month and the at the fastest pace since last August, which is an indication that even though there is slightly stronger growth, the region will not at anytime soon escape low inflation.

The OECD or Organization for Economic Cooperation and Development urges the Central Bank of Europe on Tuesday to cut immediately its benchmark interest rate, as well as take even more measures to end the period of low inflation across the common currency zone.

The majority of economists believe the central bank will not change its policy this month as they are convinced that growth eventually will push the rate of annual inflation up towards the target of just less than 2%.

Retail sales, said the statistics agency for the European Union, were up 0.3% during March. The increase makes it even less likely the ECB will change policy on Thursday.

Leave a Reply

Your email address will not be published. Required fields are marked *