The EU and Canada Continue Growing at a Solid Pace

News from the EU continued in its positive vein.  GDP was up .6% Q/Q and 2.7% Y/Y:

This chart from the latest ECB Bulletin shows that all economic sectors (consumption, investment, and exports) have contributed to growth in the last few quarters:

Unemployment was stable at 8.7%, which continues this data series continued improvement.  Inflation, however, declined .1% to 1.3%.  In contrast, core inflation was up .1% to 1.2%.  But this is still a very low level of inflation, which gives the ECB plenty of policy maneuvering room.

            The BOJ often used the phrase “virtuous cycle” in their economic analysis, which refers to one of the following processes: 1.) lower unemployment leads to increasing wages and higher consumer confidence, which results in high retail sales spending, or 2.) high sales leads increases profits which allows companies to increase investment.  Several Japanese releases this week confirmed that both cycles operating in the Japanese economy.  Retail sales were up 3.6%, which was the strongest reading in 12 months: