In Q2, the Eurozone saw GDP expand by 1 per cent on the previous quarter, and by 1.9 per cent year on year.

The cheap euro helped lift exports which were up 4.4 per cent, but then imports were up 4 per cent, too. Private consumption was up 0.5 per cent, as was government consumption. Domestic demand rose 0.9 per cent. So with private and government consumption, the balance of exports to imports and domestic demand all seeing growth lag behind GDP growth, where is the growth coming from? The answer is investment, which was up a stunning 1.8 per cent.

Meanwhile, new data revealed that Eurozone inflation was 1.6 per cent in August – at least that’s the provisional estimate – from 1.7 per cent in July. Core inflation, that’s with food, energy and tobacco taken out, was just 1 per cent in July; the figures for August are not out yet.

Finally, the latest purchasing managers indices for the Eurozone were down, but not by much. The Markit Eurozone PMI Composite Output Index dipped slightly in August, from 56.7 in July to 56.2. Markit reckons PMI data for July and August are so far consistent with quarterly GDP growth of approximately 0.6 per cent to 0.7 per cent in Q3.

The strongest pace of expansion, as measured across manufacturing and services, is currently being seen in France, followed closely by Germany. Despite the rate of increase slipping slightly in both cases, the rates of expansion in France and Germany remain close to the post-recession highs seen earlier in the year and are indicative of sustained strong GDP growth in Q3 (possibly in excess of 1% in Germany and around 0.7 per cent to 0.8 per cent in France). The German service sector expanded at the fastest rate for three years.

In contrast, growth in Italy and Spain was only very modest in August. Spain has seen a particularly weak recovery so far, and the rate of output growth slipped back to near stagnation in August as its service sector fell back into contraction. In Italy, it was manufacturing which grew at a slower pace in August, while the service sector recovered from contraction in July. However, services remain close to stagnation. The PMI data are signalling a possible easing in GDP growth from the 0.4% increase seen in Q2, to perhaps 0.2% in Q3.

And that brings us to Blighty: what did the runes reveal? See: UK economy stutters

Uncle Sam enjoys some relief.
China sees manufacturing pull up from recession level as India booms
Europe’s recovery continues
UK stutters