Eurozone Economy Grew in Q3

Various news sources, including the New York Times reported that the eurozone grew “just” 0.1 percent from the second quarter, according to data released on November 14. The dismal economic growth dampened hopes that the continent was on track for a full-fledged recovery after five years of recession and stagnation.

Jonathon Loynes, chief economics with Capital Economics in London, said the report was “a clear blow to hopes that the period of market stability seen over the last year or so would translate into a solid and sustained economic recovery.”

Most notable was the stagnated output coming out of Germany, Europe's largest and most important economy. Growth slowed to 0.3 percent, compared to 0.7 percent in the previous quarter.

France, Europe's second largest economy, contracted 0.1 percent in the quarter, compared to a growth of 0.5 percent in the previous quarter. Last week, the S&P 500 (NYSE: SPY) cut the country's credit rating to AA from AA+, citing the government's current policy course is not an appropriate path to restore growth.

Spain and Netherlands broke out of their recessions with 0.1 percent quarterly gains, while Britain led major European Union economies with a leading 0.8 percent growth.

A 0.1 percent quarterly growth translates to a 0.4 percent growth on an annualized basis for the eurozone. By comparison, based on the same third quarter data, the United States and Japan are expected to grow by 2.8 percent and 1.9 percent, respectively.