What’s Going On Here?Data out on Thursday showed that retail sales in the eurozone slumped again in August. What Does This Mean?Robust retail sales can instill confidence in a country’s consumer demand, but Europe’s dreary results will have done anything but: sales of everything from food and drink to online shopping flopped as extortionate prices forced Europeans to protect their pennies. And sure, summer travelers did get a bit happy-go-lucky at the pump, buying 5% more gas than they did at the same time last year. But that was nowhere near enough to stop total retail sales from slipping for the third month in a row, leaving them a worse-than-expected 2% lower than the same time last year. And since consumer spending is a cornerstone of Europe’s economy, this drab data will only support economists’ predictions of an impending recession. Why Should I Care?Zooming in: Any time now, Germany.
If Europe’s waiting for its biggest economy to pick things up, it might be left twiddling its thumbs. Separate data out on Thursday showed factory orders in Germany fell 2.4% in August from the month before, an unsettling stat for an economy that prides itself on its manufacturing industry. That’ll do nothing to reassure leading research institutes that already slashed German economic growth forecasts last week, now predicting the country’s output will be $158 billion lower this year and the next than they forecasted five months ago.
The bigger picture: We’re all in this together.
Europe’s been trying to fill the Russian-shaped hole in its energy supplies however it can, as fast as it can. Problem is, that frantic shopping has been pushing the price of natural gas – and the cargo boats that transport it – even higher for the rest of the world. So in an effort to solve its own energy crisis, Europe’s been exporting the pain elsewhere too, and Asia’s emerging economies – already plagued by mounting debt and weak currencies – are among the hardest hit. | 