Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Europe’s Economic Recovery Stumbles After Initial Bounceback

Published 08/21/2020, 04:00 AM
Updated 08/21/2020, 04:18 AM
© Reuters.  Europe’s Economic Recovery Stumbles After Initial Bounceback

© Reuters. Europe’s Economic Recovery Stumbles After Initial Bounceback

(Bloomberg) -- The euro-area economy unexpectedly lost momentum this month as renewed travel restrictions and concerns about the coronavirus took a toll on services.

The sharp slowdown shows that the path out of recession won’t be plain sailing, and undermines lingering hopes for a V-shaped recovery. While infections are on the rise, economic concerns mean governments are so far reluctant to re-impose the type of strict lockdowns seen earlier this year.

In a report published Friday, IHS Markit said its composite measure of private-sector activity dropped to 51.6 in August from 54.9 in July. The manufacturing gauge remained virtually unchanged, but services plunged to 50.1, a level that practically signals stagnation.

The economy had initially bounced back strongly after lockdowns were eased, though many were concerned that the pace could fade. At their last meeting in July, European Central Bank policy makers were reluctant to draw firm conclusions about the health of the economy, a stance that looks justified by Friday’s numbers.

The fallout on jobs in both sectors continued, with employment declining for a sixth straight month. That’s a key worry for governments, who fear a damaging rise in joblessness could persist for some time. While France and Germany, the euro area’s biggest economies, continued to see growth in activity, the Markit report suggested output declined in Italy and Spain.

“The euro zone stands at a crossroads,” said Andrew Harker, economics director at IHS Markit. “The path taken will likely depend in large part on how successfully Covid-19 can be suppressed and whether companies and their customers alike can gain the confidence necessary to support growth.”

Latest comments

The pizza is government-subsidized.
Monday market trend please.
That margherita pizza looks so yummy. That wood masonry baked crust.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.