European PMIs Fell But Hiring Gives Optimism

The euro zone economy continued to lose momentum in May, according to closely-watched surveys published Thursday, but it wasn’t all bad news, with hiring in the region on the up.

Markit’s composite flash Purchasing Managers’ Index (PMI) – which takes into account both the manufacturing and services sectors – fell to 53.4 in May from 53.9 in April. This was below analyst expectations of 53.8, according to a Reuters poll.

The 50-point mark separates expansion from contraction, and although the region’s composite reading remains in positive territory, it has now slipped for the second month in a row.

However Chris Williamson, Markit’s chief economist, said that, overall, the extent of the slowing should not be a concern, and highlighted the encouraging developments in hiring.

“Job creation is running at the highest rate for four years as employers remain upbeat about the business outlook, especially in manufacturing where the weaker euro appears to be helping drive strong export sales,” he said in a note.

“But there are worrying signs of confidence waning in the service sector compared to the wave of optimism seen earlier in the year.”

via CNBC

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza