Consensus forecasts suggest the Eurozone is heading for a recession. The risks to the Eurozone economic outlook remain firmly skewed to the downside. However, for investors, it is worth pausing to consider what, if anything, the consensus forecasts may be missing.
The latest Eurostat unemployment numbers for August showed a broad-based decline in peripheral Eurozone jobless rates to new cyclical lows (Italy, Spain, Portugal, Greece).
There were large upward revisions to tech investment in both Portugal and Spain too. In the case of Portugal, real investment in intellectual property products is trending sharply higher as a share of real GDP.
It is very easy to forget: across the Eurozone, unemployment is falling, wage growth is accelerating and consumption remains firm. Eurozone real retail sales ex-food & auto fuel rose 3.5% y/y (3-month moving average) in August, defying the manufacturing slump.
Finally, the annual rate of house price growth across the Eurozone firmed from 4.10% in Q1 to 4.25% in Q2.
