The Eurozone unemployment rate fell to a 33-month low, indicating Europe's labour market may be turning a corner. The unemployment rate fell to 11.2% in January, down from 11.3% in December. The Eurostat report states that the number of unemployed people in the euro area fell by 140,000 in January. However, unemployment in the Eurozone remains widely varied with unemployment levels in Spain are at 23.4% in comparison to Germany at 4.7%.
Also inflation in the Eurozone rose to -0.3% last month, showing prices did not fall as fast as expected. This is a big jump up on the -0.6% decline recorded in January. The report stated that service sector prices rose by 1.1%, alcohol and tobacco prices rose by 0.5%, meaning the decline is mainly due to falling energy prices, which should give the Eurozone economy a boost as consumers will have more money in their pockets. Fears that Europe is being dragged into a deflationary downturn may have been overstated.
Growth in Britain's manufacturing sector hit a seven-month high according to data released yesterday. The UK manufacturing PMI rose to 54.1 in February up from 53.1 in January, suggesting economic conditions picked up last month. One note of caution, consumer goods rather than heavy-duty machinery led the increase this suggests it may not be a sustainable recovery.
Mortgage approvals edged up in January according to data yesterday. A total of 60,786 loans were approved in January, up from 60,349 in December. However, this is still a significant drop from the 75,559 approved in January 2014 hinting that the weakening housing market has bottomed out. There is expected to be support for the housing market in the coming months due to a number of factors; recent stamp duty reform, low mortgage rates, elevated consumer confidence, a pick-up in earnings and rising employment.
According to Markit the manufacturing sector jumped in February with factories reporting their best gains since October. The Markit purchasing managers index rose from 53.9 in January to 55.1 last month, compared to an expected level of 54.3
However, The Institute for Supply Management is not as optimistic as the Markit survey of US factories. The ISM said its index of factory activity fell to 52.9 in February from 53.5 the month before, the lowest reading since January 2014. Economists had been expecting a reading of 53.1.
GBP- 09:30 : UK PMI Construction (Feb) expected to fall to 59 from 59.1
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