"A report Friday from the German Federal Statistical Office showed that retail sales in Germany fell sharply in December, dropping 2.5 percent, after a 0.9 percent rise in November."
The WSJ adds that consumer purchases fell slightly in France. The two largest economies using the euro are suffering from falling consumer purchases.
Sixth, the "good news" that the NYT hypes ("industrial activity in the euro zone was at its highest level since mid-2011") is bad news. That increase in industrial production should have been a substantial boost to the economy. The fact that it did not does so implicitly confirms that consumer demand was deeply inadequate and counterbalanced the growth in industrial production. If the euro appreciates and/or consumer demand continues to fall in Germany and France, it will be difficult to maintain those industrial activity levels.
Seventh, the good news that the WSJ hypes ("the number of people without jobs fell by 129,000") is likely to be even worse news. As with the U.S., very large numbers of Europeans are leaving the labor force. Because they have given up looking for jobs they are no longer "unemployed." Unlike the U.S., the Eurozone is suffering from severe migration. This is particularly true in the nations of the periphery. In these nations it is becoming the norm for college graduates to emigrate. That bodes badly for future Eurozone growth.
Eighth, the "nascent" "flight to quality" triggered by very bad economic troubles in Argentina, South Africa, and Turkey combined with increasing worries about China could make the troika's already impossible strategy of turning every EU nation into a net-exporter fail more spectacularly. If the problems persist the euro's exchange rate will appreciates relative to most nations (other than the U.S.), reducing EU exports.
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