Tags: Europe | recession | global | recovery

CNNMoney: Europe's Weak Economy Weighs Down Global Recovery

By    |   Friday, 02 Nov 2012 11:46 AM

The economy remains on the upswing in the United States and China, but the recession in Europe continues to drag down the global recovery, according to CNNMoney.

On Thursday, the United States reported several indicators of economic improvement. For instance, gains were observed in manufacturing, consumer confidence and private sector payrolls. Additionally, U.S. automakers said car sales increased again in October, despite Hurricane Sandy's potential effects on month-end results.

Construction spending also rose, while the number of imports declined.

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Given these figures, the U.S. economy is estimated to have grown slightly faster in the third quarter, Michael Englund, an economist at Action Economics, told CNNMoney. He predicts third-quarter gross domestic product (GDP) to reach 2.3 percent, which is higher than the U.S. Commerce Department's expectation of 2 percent growth.

Meanwhile, there are signs the financial downturn in China is not as bad as initially thought, given that factories in the region have increased activity recently.

Although the world's two largest economies are showing signs of improvement, Europe's weak economy is dampening worldwide growth.

"The eurozone is not out of the woods yet," said Kevin Dunning, a member of the Economist Intelligence Unit in London. "The recession looks like it will be long and dragged out, even if financial conditions are not quite as tense as they were."

Unemployment in the 17-nation eurozone reached a record of 11.6 percent in September. The region could fall even deeper into a recession, as preliminary data released in October showed eurozone manufacturing and service activity was at its weakest in 40 months, according to global financial information services company Markit.

Also, separate data showed that eurozone GDP decreased by 0.2 percent in the second quarter, and it is expected to have declined further in the third.

"The eurozone situation is still unresolved," said Sara Johnson, research director of global economics at IHS Global Insight, CNNMoney reported. "It's taking a long time to put in place the framework for banking and fiscal union to support the monetary union."

Despite efforts by the European Central Bank to stabilize the financial markets, economists still say Europe will be slow to bounce back far into 2013.

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The economy remains on the upswing in the United States and China, but the recession in Europe continues to drag down the global recovery, according to CNNMoney.
Europe,recession,global,recovery
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2012-46-02
Friday, 02 Nov 2012 11:46 AM
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