Euro Area Treading Water

EuroCoin in October indicates quarterly growth rate of -0.67 (q/q). The Q3 flash estimate for Euro Area GDP was -0.1%.

Figure 1: Euro Area GDP growth rate (not AR) (red circle), and EuroCoin (blue line), both q/q (not AR). Source: Banca d’Italia.

From CEPR release:

In October, €-coin dropped significantly (to -0.67, from -0.18 in  September), confirming the underlying weakness of euro-area activity.
This decline is due to a deterioration in financial, demand and business confidence indicators.

The €-coin indicator developed by the Bank of Italy provides a summary index of the current economic situation in the euro area. The indicator is an estimate of quarterly GDP growth shorn of the most erratic components (seasonal variations, measurement errors and short-run volatility). €-coin is published monthly by the Bank of Italy and CEPR.

The Cascaldi-Garcia/Ferreira/Giannone/Modugno  nowcast for Q4 as of 11/3 is for -0.1% q/q (not AR). The Survey of Professional Forecasters from late Sept/early October consensus for Q4 was +0.1%.

Over the last four quarters, the y/y growth rate has been +0.1%. Using this nowcast of -0.1% and the flash Q3 of -0.1% means q4/q4 growth will be approximately zero.

As in the US, the determination of a recession usually takes place substantially after a business cycle peak, and based on other variables in addition to GDP. In this case, the CEPR-EABCN Euro Area Business Cycle Dating Committee is a key arbiter.

Aside: As of today (11/7), GDPNow for 4th quarter US q/q growth is 2.1% SAAR, or about +0.5% q/q (not AR). If the Q4 nowcast holds, then q4/q4 growth in the US will be 2.8%(!).

35 thoughts on “Euro Area Treading Water

  1. Macroduck

    There has been a suspicion that Israel’s goal in its war in Gaza is to empty Gaza of Palestinians. Here are a few indications that Israel aims to make Gaza unlivable, which conforms to the notion of emptying Gaza:

    Israeli forces have attacked fishing vessels:

    https://bnn.network/breaking-news/crime/occupation-armys-attack-on-gazas-fishing-boats-an-assault-on-livelihoods-and-rights/

    Bakeries:

    http://www.aljazeera.com/amp/gallery/2023/11/2/gaza-bakeries-destroyed-by-israeli-strikes

    Hospitals:

    http://www.aljazeera.com/amp/gallery/2023/11/7/israel-continues-to-attack-hospitals-in-gaza-city-killing-at-least-eight

    Water supply:

    https://www.haaretz.com/us-news/2023-10-29/ty-article/.premium/internal-u-s-state-dept-document-urges-pressure-on-israel-to-renew-gaza-water-supply/0000018b-77ea-d1da-a1bb-7ffaf09e0000

    https://www.aa.com.tr/en/middle-east/israeli-airstrike-hits-gaza-water-reservoir-supplying-rafah-neighborhoods/3043167

    By the way, the State Department has just announced that the U.S. doesn’t support forced displacement of Palestinians, also that the U.S. does not support Israeli occupation of Gaza:

    https://www.reuters.com/world/middle-east/us-says-it-does-not-support-any-forced-relocation-palestinians-gaza-2023-11-07/

    Biden had earlier said such an occupation would be a big mistake:

    https://www.washingtonpost.com/world/2023/10/15/israel-gaza-war-updates-hamas-palestine/

    1. pgl

      I have an idea – holdup that money for Israel until Bibi resigns. He has been a problem for over 20 years.

      1. Moses Herzog

        Netanyahu is destroying Israel security for at least the next 3 decades. At the very least Netanyahu is making Israel’s defense multiples more costly for both the Israel government and the U.S. government (Which the Israelis don’t give a damn how much their security costs America or they never would have voted for the bastard to start with).

  2. pgl

    I was asked to review something related to trade in the agricultural sector which got a lot of things right but had a paragraph on world food production that could not be correct. The authors, however, did let me know about this very interesting document:

    https://www.fao.org/documents/card/en/c/cc2211en

    World Food and Agriculture – Statistical Yearbook 2022

    It has a lot on production, prices, and all that jazz. And I believe there may be a 2023 yearbook either out of coming soon.

    1. pgl

      Chapter 4 is entitled SUSTAINABILITY AND ENVIRONMENTAL ASPECTS OF AGRICULTURE

      Short and to the point. Anyone who is stupid enough to tell us that Global Warming is a good thing needs to read this. But of course little CoRev will not.

      1. CoRev

        From your source:
        1) Europe, Asia and Oceania had forest land expansion coupled with agricultural land reduction from 2000 to 2020
        2) The global harvested area of primary crops went up 22 percent between 2000 and 2020 to 1.4 billion ha
        3) Water stress disaggregation by river basins shows that the basins affected by severe water stress are located not only in Northern Africa and the Near East but also in Northern America, Central and Southern Asia and on the west coast of Latin America.
        4) Soils – The cropland nutrient budget represents the difference between the quantities of synthetic and organic nutrients (nitrogen, phosphorus and potassium) added and withdrawn from the cropland by the production of crops and livestock. (Results mixed)
        4) Data for CO2 is provided and “Next were methane (CH4) with 4.1 Gt CO2eq (39 percent) and nitrous oxide (N2O) with 2.2 Gt CO2eq (21 percent).” But, can anyone list he MISSING GHG?

        Summarizing the actual results we find: “World production of primary crops increased by 52 percent between 2000 and 2020, to 9.3 billion tonnes, on level with the 2019 production” Al of this is clearly from PGL’s source

        So what is it you think is happening? Your own sources shows increased production, increased Ag land all while Global Warming has increased.

        1. pgl

          So global warming and not improved crop science led to these productivity increases?

          OK time to apologize to JohnH. He may be dumber than a retarded rock but he is way smarter than little CoRev.

          1. CoRev

            Only you would believe that: “So global warming and not improved crop science led to these productivity increases?” Single factors, just like CO2, are the ONLY cause of any change?!?

            You do amaze.

          2. pgl

            CoRev
            November 8, 2023 at 10:36 am

            Damn CoRev – you just made my point. Yea – you do remind me of Gilligan whenever the Professor made a point. Repeating it in dumb downed language as if it were a new point.

            Oh wait – Gilligan was 10 times smarter than little CoRev.

          3. pgl

            Nobel Prize winning CoRev is telling us that improved crop yields has nothing to do with scientific research but is all due to a warmer climate. Huh – why does this journal not publish his ground breaking research in agricultural economics?

            Genetic strategies for improving crop yields
            Julia Bailey-Serres, Jane E. Parker, Elizabeth A. Ainsworth, Giles E. D. Oldroyd & Julian I. Schroeder
            Nature volume 575, pages109–118 (2019)

            https://www.nature.com/articles/s41586-019-1679-0

            Abstract
            The current trajectory for crop yields is insufficient to nourish the world’s population by 2050. Greater and more consistent crop production must be achieved against a backdrop of climatic stress that limits yields, owing to shifts in pests and pathogens, precipitation, heat-waves and other weather extremes. Here we consider the potential of plant sciences to address post-Green Revolution challenges in agriculture and explore emerging strategies for enhancing sustainable crop production and resilience in a changing climate. Accelerated crop improvement must leverage naturally evolved traits and transformative engineering driven by mechanistic understanding, to yield the resilient production systems that are needed to ensure future harvests.

          4. CoRev

            Another well DUH! comment by PGL. “The current trajectory for crop yields is insufficient to nourish the world’s population by 2050.” But, that means the control for this conclusion is production per hectare, and NOT the total number of arable HECTARES. This chart tries to show where and how much that factor may change: https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Fwww.canr.msu.edu%2Fagriculture%2Fuploads%2Fimages%2FFeedingWorldPart1-Fig3.PNG&f=1&nofb=1&ipt=9ef7042c91d24d0e44930099c0a69cd73bcb9f9021ab085d1c6efc857ce1ed85&ipo=images

            Moreover, an effect of Global Warming is that there is even more arable land being created and that marginally arable land is moving to better producing land, but even PGL notes that some of the recent progress has been due to better Ag science.

            Here’s a chart of how well the world has progressed: https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Fwww.ifpri.org%2Fsites%2Fdefault%2Ffiles%2Fghi%2F2015%2FarticleContent%2F3710%2Fghi_2015_ch03_fig03_744_1.png&f=1&nofb=1&ipt=f472f2e5121b8757319911d09cec206df29103e3f76904ad9267b53f6df7ff8d&ipo=images

        2. pgl

          Also from the UN document:

          Worldwide, winters and summers alike are becoming increasingly hotter than the 1951–1980 average (see FIGURE 69). With 1.44 °C more than the world reference measured over land, 2021 was the fourth warmest year at the global level, behind 2020 (1.71 °C), 2016 (1.66 °C) and 2019 (1.45 °C). Europe is the region where the temperature change has been the highest in 2021 (and also for most of the 2000–2021 period), with 1.60 °C (a significant decrease compared with 3.35 °C in 2020), followed by Asia (1.55 °C), the Americas (1.45 °C), Africa (1.43 °C) and Oceania (0.63 °C). The average temperature change in the 2010s was 1.24 °C, compared to 0.95 °C in the 2000s. As seen in TABLE 59, 141 countries had a mean annual temperature change at least 1.0 °C higher than the 1951–1980 average in 2020; the largest mean annual temperature change was recorded in Tunisia, Iraq and Canada (2.54 °C).

          OK – global warming exists. Even climate change denier CoRev has to admit this (finally). But now this lying moron wants us to believe Global Warming increases agricultural productivity? Damn CoRev does say the dumbest things!

          1. pgl

            CoRev
            November 8, 2023 at 10:37 am
            PGL, see my earlier comment.

            I did – it was stupid. Re-reading it does not make it better.

    1. pgl

      Wait – let me get this straight. She notes the surge in long-term rates were unexpected financial tightness but still wants to raise interest rates even more? OK I guess.

      But she also thought the latest employment news from the BLS showed further labor market strength. I guess she read only the 1st sentence.

      1. Moses Herzog

        There are many many things I’m stupid about……. social skills in general, what goes on in women’s minds, which plants attract butterflies and which ones don’t, science, higher levels of math, clothing fashion, finding dobermans or miniature pinschers at dog shelters jam-packed with pit bulls and mutt mixed breeds. How to throw a curve ball, the cure for male pattern baldness.

        Guess which topics I don’t generally discuss and STFU about in a public setting unless asking questions??? All of the above and about half-a-million others.

  3. pgl

    https://twitter.com/Gerashchenko_en/status/1721797896658456745

    An impressive detonation of Russian armored vehicles! The Warriors of the 47th Mechanized Brigade showed the defeat of the Russian armored vehicles attack near Avdeevka. Russian tanks and APCs with assault units tried to break through to our positions, but part of their equipment was blown up on the mines and then was finished by artillery fire. The fire show at the very end was due to several cluster shells accurately covering a group of Russian armored personnel carriers. A great success of the 47th Brigade and a special thanks for the high quality of the video to the aerial reconnaissance brigade – their special effects are cooler than in Hollywood, don’t you think?

    I get Anton Gerashchenko is pro-Ukrainian. But I decided it is time to tick little Jonny boy off given his Putin cheerleader skirt is getting rather stained.

    1. Ivan

      It shows how problematic it is to conduct mechanized maneuver warfare in modern times. Combining drones for visualizing with high precision ammunition for targeting “protected” vehicles, has turned the whole thing on its head. Soldiers may be safer in small groups on foot (that can spread out and hide), than in these vehicles that are likely to be discovered and effectively targeted, especially if they attack in convoys. It’s all about the drones – how many do you have and how sophisticated are they. Ukraine has already crossed the Dnipro and are on the left bank in Kherson. No armored vehicles needed or even wanted. Russia is stuck in their old ways; if it doesn’t succeed do the same but with twice as much.

  4. Moses Herzog

    That Xi Jinping is an economic genius, isn’t he??
    https://tradingeconomics.com/china/exports-yoy

    If this gets any worse Xi is going to have to steal Disney IP and turn to Winnie-the-Pooh merch sales.

    I can see it now, Winnie-the-Pooh T-shirt with a caption underneath “China…… It’s Not Your Father’s North Korea”

    1. pgl

      Exports from China dropped by 6.4% year-on-year to USD 274.83 billion in October 2023, faster than a 6.2% fall in the previous month and worse than market forecasts of a 3.3% decline. This marked the sixth consecutive month of declining exports, reflecting persistent weak demand from abroad.

      Damn!

      1. Moses Herzog

        One of Xi Jinping’s many problems right now is donald trump sitting in a courtroom doing his Hamilton Burger impression. There’s few other leaders who can take away attention from Xi in the “that sure was a dumb-ass move” Dept. in the way donald trump could have.

      2. CoRev

        PGL, so I was correct, even again? If you look at the 5 Yr chart you will find that the bulk of price increases occurred under Trump. $14.17 on 1/11/21. So which policiy(s) did Biden implement that ?j/dumped? prices from $14.70 to $13.40 a bushel ?

        I’ll wait.

        1. pgl

          Wait – what was that CoRev line again? WEATHER WEATHER WEATHER!!!!

          If you are saying Trump’s stupid trade war drove up soybean prices, then you sir are indeed the dumbest troll ever created.

        2. pgl

          Hecht did not “So which policiy(s) did Biden implement that ?j/dumped? prices from $14.70 to $13.40 a bushel ?”

          Except he spelled things properly and wrote coherent sentences unlike the jumbled mess CoRev spews.

          Oh yea – his policies may have increased the cost of production for soybeans which in CoRev’s little world lowers market prices. Yea – CoRev is indeed THAT STUPID.

        3. pgl

          “The 2019 low came as a trade dispute between US and China caused the country that typically purchased one-quarter of the US annual crop to decrease its buying.”

          Just in case lying little CoRev forgets to read this sentence.

        4. Moses Herzog

          @ CoRev
          Do you think…… “Mr. I Am Always Correct No Matter What”…… that as everyone and their brother (outside of you and about 2100 toothless cretins at the Jan 6th hyenas convention) knew Biden was going to be the next President of America about 2 months prior to the Jan 11th price rise, that that would have any affect on commodity prices?? Do you see near to exactly November 6th where the graph goes after??

          Were you the one who had the failed restaurant?? Did you shutdown the restaurant on Saturday and Friday nights??? Oh wait, that was sammie.

          1. pgl

            Wait – CoRev and his buddies think Trump is still President today. Stop The Steal and make sure you buy the latest goodies from the My Pillow guy.

        5. pgl

          Soybean prices passed $17 on June 13, 2022. Now let me get this straight – you are saying that Trump was still President then? Oh wait – your buddies are still saying Trump won the 2020 election. Hope you enjoy your My Pillow slippers that Santa is bringing you.

  5. Moses Herzog

    Are Menzie’s graph footnotes telling us in a not-so-subtle way this Euro Area GDP REALLY would have been Prof Rosser’s kind-uh GDP??

    How many licks does it take to get to the tootsie roll center of a tootsie pop??

    …….. The world may never know.

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