Europe has dropped into recession, or nearly so. Eurostat reported that third-quarter gross domestic product in the euro-area fell 0.1%, compared with the second quarter. Among the EU27, GDP registered a 0.1% improvement. In the second quarter, both regions had negative GDP of 0.2%.

The drag was from the countries that would be expected — Portugal (-1.1%), Spain (-0.3%) and Italy (-0.2%). The news will not affect bailout plans. There is nothing in the report that was not expected.

Eurostat contrasted the GDP of the region with that Japan and the United States, but with the drop in Europe that contrast may be much less in the fourth quarter.

During the third quarter of 2012, GDP increased by 0.5% in the United States, compared with the previous quarter (after +0.3% in the second quarter of 2012) and fell by 0.9% in Japan (after +0.1%). Compared with the same quarter of the previous year, GDP rose by 2.3% in the United States (after +2.1% in the previous quarter) and by 0.2% in Japan (after +3.4%).

Douglas A. McIntyre