Eurozone growth soars record 12.7% but fears grow for winter

The Associated Press ^ | October 30, 2020 | By DAVID McHUGH

[Oldeconomybuyer]

The European economy grew by an unexpectedly large 12.7% in the third quarter as companies reopened after severe coronavirus lockdowns, but the rebound is being overshadowed by worries that growing numbers of infections will cause a new downturn in the final months of the year.

The upturn in the July-September quarter - and the worries about what’s ahead - echoed the situation in the United States, where re-openings led to strong third-quarter recovery but didn’t dispel fears for the winter months.

The European rebound, reflected in figures released Friday by EU statistics agency Eurostat, was the largest increase since statistics started being kept in 1995. It followed an 11.8% contraction in the second quarter in the 19 European Union member countries that use the euro currency. The April-June period was when restrictions on activities and gatherings were most severe during the first wave of the pandemic. Many economists had expected a rebound of around 10%.

The rebound was led by France, with an enormous 18.2% increase, followed by Spain with 16.7% and Italy with 16.1%.

Rosie Colthorpe, European economist at Oxford Economics, said that the gains made up almost three-quarters of the lost output from the first six months of the year. But she added that “new containment measures mean we think the recovery will grind to a halt in the fourth quarter, with output expected to fall once again.”

European Central Bank head Christine Lagarde said Thursday she expected November to be “very negative,” adding that “most likely our fourth quarter number will be to the downside. Will it be negative? We don’t know at this point in time.”

[Oldeconomybuyer]

[MattMusson]

Notice that the AP reports the Eurozone in FULL YEAR 12.%
But reports US in Quarterly 7.6% rather than full year 31.%

[wheatmiller]

So the AP reports 12% 3Q increase as SOARING!!! but ignores US at >30%?

I greatly dislike the media...I’d say hate, but I’m working on my anger issues.

[SeekAndFind]

RE: Eurozone growth soars record 12.7%

Contrast that to 33.1% for the USA.

[DoughtyOne]

12.7 vs 33.1

LOL

the Continentals - darn that Trump

[TomGuy]

Eurozone growth soars record 12.7% but fears grow for winter

Absolutely, positively, can't have good news without a dose of negative news to offset it.

FEAR GROWS!

These good economic numbers are only temporary, as the leftists/globalists pine for the old days of the 'new normal' Obama economy.

[mikey_hates_everything]

And with Trump winning, the US isn’t on the eve of a new national lockdown as the UK and France are.

[Red in Blue PA]

12.7 vs 33.1

Guess which one the media will be heralding?

[DoodleBob]

If you go to the raw data at Eurostat, you'll find the following GDP values in constant (2015) prices for the EU, in MM of Euros:

4Q2019: 3,332,865.8
1Q2020: 3,223,393.1
2Q2020: 2,854,943.6
3Q2020: 3,199,906.6

Thus, the % change from 2Q to 3Q is actually 12.08%...maybe someone moved a decimal point somewhere. That's not an annualized number, it's a straight QoQ percentage change. And yes, it is more than the 7.4% QoQ rate the US produced in 3Q2020 vs 2Q2020.

However, in the 2nd quarter, the US economy fell 9% QoQ vs the 11.4% QoQ drop in the EU. So, if the EU fell more than the US, the stronger bound back isn't that surprising.

What is more important, to a large extent, is the output relative to 4Q2019, i.e., pre-COVID19. On that metric, the EU is at 96.01% of pre-virus output. So, they're getting back, but they're still below where they used to be.

In contrast, if you look at the US raw data from the BLS, you'll find that the 3Q2020 real US GDP of $18,584.0bn was 96.52% of the 4Q2019 real US GDP of $19,254.0.

So, the US is about 50 basis points stronger in the return to normalcy game vs the EU. So we got that going for us, which is nice.

[BfloGuy]

Notice that the AP reports the Eurozone in FULL YEAR 12.%

European GDP figures are not multiplied by 4 as in the U.S.

The 12.7% was the actual quarterly growth. The U.S. quarterly growth rate was 1/4 the stated GDP number.

Quite astounding actually.

[DoughtyOne]

Thanks DoodleBob.

[Cronos]

my 3 cents:

1. This is of course after a DEEP and steep decline in Q2, so it will be high

2. Here in Poland I see and saw a lot of people doing home renovations, buying things in preparation for the “long winter”

3. Business-wise, my clients in Central and Western Europe are placing orders left and right (in retail, FMCG, finance, construction and medical/pharma)

[MinorityRepublican]

Depends on who we vote for on Tuesday.