Economic indicators in Europe are showing signs of life!
The reason this i such an exciting event is that the European economy has more or less stagnated for 7 years. Real (inflation-adjusted) GDP for the EU as a whole is still below the pre-GFC peak in Q1 2008, after a series of policy blunders by the ECB (European Central Bank) and by the EU and key European governments.
US employment data for February continued the strengthening trend of the last year, despite very cold weather over much of the eastern US and unseasonably warm weather/drought over the rest of the country. This was the highest increase in the three month average in a decade, if you ignore the short-lived spike when the US Federal Government hired a couple of hundred thousand temporary workers to take the ten-year census in 2010. In fact, it was close to the highest in three decades.
At its board meeting two weeks ago, the Reserve Bank of Australia cut the “cash rate”, the rate it charges to lend to the banks, from 2.5% to 2.25%. They took this step because the evidence was that economic conditions were deteriorating so rapidly that even the risk of a house price boom was preferable to inactivity on the interest rate front and the resulting intensifying economic slowdown.
In Greece, an old-fashioned socialist political party, Syriza, has been elected to the Greek government, almost winning a majority in its own right. The second largest party is a neo-Nazi party called (in English) ‘Golden Dawn’; the centrist parties have been decimated. In Spain, ‘Podemos’ (‘We can’), another party opposed to austerity and intending to ask for some debt forgiveness, would win an election if it were held now.