As no one is immune to the travails of debt troubled sovereign nations in Europe, the slowdown in Asia and Latin America and mediocre growth in the US, Germany’s economic stats today showed chinks in its armor. The May German IFO business confidence # fell 3 pts to a 6 month low and was 2.5 pts less than expected. Also, German mfr’g PMI fell to 45, the lowest since June ’09 and this led to the euro zone mfr’g and services composite index to drop also to the weakest since June ’09. French mfr’g PMI fell to 44.4 from 46.9 and business confidence dropped 2 pts to a 3 month low. The UK economy was confirmed to be in an official recession as Q1 GDP was not revised up to a positive reading but was instead revised lower to an even weaker one. On the heels of a non event EU summit and just weeks before another Greek election, every comment from an ECB member will be parsed. ECB member Nowotny this morning said a Greek exit will be a mess but also said “a good central bank is ready for everything” and the “ECB hasn’t used its full arsenal.” In Asia, China’s HSBC flash mfr’g PMI for May fell .6 pts to 48.7, the 7th month in a row below 50.

Category: MacroNotes

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One Response to “German economy shows chinks in its armor”

  1. blackjaquekerouac says:

    “in the land of the mercantilist world the American consumer is still King.” the fact that he/she is flat broke “only makes it more of a challenge.” and a challenge it is indeed! the fact of the matter is the global economy…let alone the American one…will not start moving in the right direction until the US labor market turns around “con gusto.” i know i’ve been working my butt off for years now…but without a massive appreciation of the labor participation rate there is no bargaining power for labor…so unless and until that turns on “scales of production” and most importantly “scales of economy” will succeed. that is not “Germany” which is foregoing the euro zone market in the name of something i simply cannot even fathom let alone understand. I remain bullish on the Upper Mid-West of the US as the “most productive place on earth.” This region is the modern equivalent of North Africa to the Romans. Amazingly “it has little to no government involvement in its development” besides the highway system. “Northern Germany” could…indeed should be…much of the same. Unfortunately History and “Putin’s Russia” simply don’t let it happen.