Neither September nor the two months preceding were good months for the eurozone. Factories saw demand fall and countries saw unemployment rise as Markit Economics said the activity—or, rather, lack of it—indicated a “new recession.”
Reuters reported Monday that according to Markit Economics’ eurozone purchasing managers’ index (PMI), factories in the eurozone were hard hit in the three months to September despite cutting prices. Although September’s PMI actually increased to 46.1 from August’s level of 45.1, it clocked its fourteenth month below 50—the level that denotes economic contraction.
“Despite seeing some easing in the rate of decline last month, manufacturers across the euro area suffered the worst quarter for three years in the three months to September,” Chris Williamson said in the report. Williamson, chief economist at Markit, continued, “The sector will act as a severe drag on economic growth. It therefore seems inevitable that the region will have fallen back into a new recession in the third quarter.”
Bloomberg reported that unemployment in the region was also at its highest level on record. The European Union’s statistics office in Luxembourg released figures Monday indicating that the August level of joblessness was 11.4%, the highest since the data series began in 1995. Figures for June and July unemployment were revised upward, and reflected the same 11.4% rate.