Business cycles: Tracking the euro-zone economy in real time

Posted: November 19, 2012 in economy
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THE greatest short-term threat to the world economy continues to be Europe’s debt crisis. The progress of the euro-zone crisis will, in turn, depend on the length and depth of the euro-area ecession. If output is shrinking and unemployment rising, then austerity measures are likely to make economic conditions worse while raising very little new revenue. The euro zone may fall ever deeper into a hole.That’s an unnerving possibility. As of the third quarter of 2012, the euro zone economy is officially in recession. GDP in the euro area shrank 0.1% in the three months to September after contracting 0.2% in the second quarter. That marks four consecutive quarters of flat of falling growth. Output fell sharply in peripheral economies like Spain and Italy but also tumbed in core countries like Austria and the Netherlands.Conditions look like getting worse. An analysis of recent data points by Now-Casting, which publishes “real-time” economic forecasts, points toward deeper contraction in the fourth quarter of 2012. And on the current pace, the euro zone’s recession will continue through at least the first three months of 2013. You can see the information that goes into their forecast in the interactive chart …

via Economic Crisis


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