Eurozone: Data suggest a recession is either imminent or inevitable - Wells Fargo
|Analysts at Wells Fargo, took a look at the most recent economic reports and do not believe, the data at present suggests a Eurozone recession is either imminent or inevitable.
Key Quotes:
“Like ECB President Draghi, we do not (yet) believe these important economic indicators are signaling an approaching Eurozone recession. GDP growth has averaged 0.33% per quarter over the past three quarters, a pace that has been consistent with the Eurozone avoiding recession in the past (Q3 2004-Q1 2005 and Q2 2001 to Q1 2002). Similarly, the December 2018 PMI of 51.1 is not yet at a level that would more clearly and consistently signal an approaching economic downturn, although it is close.”
“While some recent indicators are worrying, we do not believe a Eurozone recession is imminent or inevitable. In our view, GDP growth would need to range between 0.1%-0.2% (or slower) per quarter for three or more quarters and the composite PMI would have to remain at or below the 51.0 level for several months before we would become seriously concerned that the Eurozone is either imminently approaching, or in, economic recession.”
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