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What's going on?
Some important economic data came out for both Europe and the US on Tuesday. Europes recovery remains pretty tepid but the US appears to be doing slightly better than feared.
What does this mean?
In the US, a major measure of services (i.e. things like insurance, shopping and eating out) showed that activity is picking up more quickly than any month since October of last year. Thats quite good news, given services account for roughly 80% of the US economy.
In Europe, the data showed its service economy has been expanding at the weakest pace since January 2015. Also, German factory orders, which are, unsurprisingly, defined as orders from German factories, fell to their lowest level in six months. The UK is experiencing a slower expansion in services activity as well, although some of the weakness is being attributed to the upcoming Brexit referendum and, therefore, might be only temporary.
Why should I care?
The bigger picture: The trend is your friend (when it comes to analysis). No individual piece of data is all that important but, rather, its the overall picture that matters. Tuesdays data fits with the narrative that Europes economic growth is recovering from the financial crisis but not accelerating like one would hope. But perhaps the more interesting news was from the US data, which suggested that services are not struggling as much as many feared earlier this year.
For you personally: America > Britain > Europe. Sorry continentals, youre still lagging. Unemployment in Europe remains above 10% while its around 5% in the UK and US. The only (major) bright spot in Europe remains Germany (5.3% unemployment).
Originally posted as part of the Finimize daily email.
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