Eurozone economic optimism confirmed as unemployment drops further in April | snaps

The eurozone economy is showing more signs of picking up as the manufacturing sector seems to be bottoming out while the service sector motors ahead. As always around turning points, the data is still somewhat ambiguous, but today’s economic sentiment indicator adds to expectations of continued modest growth in the second quarter of 2024. This would mark a clear break from 2023 when the economy broadly stagnated.

The economic sentiment indicator increased from 95.6 to 96 in May, with improvements in sentiment for both industry and services. Recent production trends in manufacturing improved and recent demand for services was also better than reported in April. Importantly, selling price expectations in services continued to trend down, indicating that domestic inflation is set to moderate further.