What's going on?

Influential surveys of business activity on both sides of the Atlantic were released on Wednesday! They showed that the eurozone economy continues to pick up its pace while America�s momentum may be fading.

What does this mean?

The eurozone�s economy has significantly picked up over the past six months or so � Wednesday�s announcement suggests that business activity is now growing at its fastest pace in six years. Meanwhile in the US, economic growth has also been strong over the past six months (in fact, some signs suggested it was much stronger than Europe�s a few months ago), but according to the data released on Wednesday, activity in March grew at a notably slower pace.

Why should I care?

For markets: The eurozone�s growth is getting investors� attention. (tweet this)

While surveys like the ones released on Wednesday don�t tell the whole story (it takes lots more time and data to do that), the contrast between the two reports is further evidence that Europe�s economic growth is on the up. Typically, international investors move their money into regions where growth is good (since an uptick in economic activity tends to be good for companies� profits and hence their stocks). So, if signs persist that the eurozone�s growth is picking up while America�s is moderating, expect to see more investors shift towards Europe, as some have already done.

The bigger picture: There is a disconnect developing between �survey� data and data on actual economic activity.

Economists usually talk about two major types of data: data that comes from stuff like sentiment surveys (called �soft� data since it�s less certain) and data that measures discrete quantities like employment and business spending (called �hard� data). The soft data has, for months, suggested that the US economy is picking up sharply. However, this hasn�t (yet) fed through into the hard data. Soft data has historically foreshadowed hard data, so we should see those figures pick up soon � but some economists are doubtful.