Just as the U.S. economy has hit long and rapid strides in employment, consumer confidence, and GDP growth, the Eurozone has followed suit. According to new data from IHS Markit, PMI and employment indicators surged in November.
The research firm reports:
Eurozone growth kicked higher in November to put the region on course for its best quarter since the start of 2011. Multi-year highs were seen for all main flash PMI indicators of output, demand, employment and inflation in November. Business activity and prices rose at the steepest rates for over six years, while the largest accumulation of uncompleted work for over a decade encouraged firms to take on staff at a rate not seen for 17 years.
The headline flash IHS Markit Eurozone PMI, based on approximately 85% of final replies, rose to 57.5 in November, up from 56.0 in October and its highest since April 2011.
Statistical comparisons of the PMI data with quarterly changes in official GDP indicate that the PMI is so far running at a level signalling a 0.8% increase in GDP in the final quarter of 2017, which would round-off the best year for a decade.
The employment statistics, although not exactly based on the same measures as in the U.S., have improved to levels set over a decade ago. U.S. unemployment has hit levels last seen before 2000.
The news raised the specter of central bank rate increase. The Federal Reserve recently indicated it would raise rates next month after a decade of historically low rates. The ECB will probably do the same within several months.
The Fed news caused a sell off in Chinese stocks, which means that the Eurozone and U.S. economies could trigger more of the same. While global economies improve, the start of higher rates could sink stock markets