How French, German economies grew
TEXT OF STORY
Bill Radke: Guess what — the recession is over, at least in Germany and France. The two biggest eurozone economies both said today their GDP grew by three-tenths of a percent last quarter. Economists were expecting those numbers to stay in negative territory. Reporter Christopher Werth has more.
Christopher Werth: This proof that the economy is growing again comes on the heels of several weeks of better than expected news. Manufacturing orders are up in Germany, and consumer sentiment across Europe has been on the up-tick, says Stefan Schneider of Deutsche Bank.
STEFAN SCHNEIDER: Private consumption in Germany has been more or less flat for the last several years, and so seeing private consumption picking up at a time when basically the overall economy is nose-diving is a little bit of a surprise.
Schneider says it’s an indication that stimulus packages in Germany and France are doing what they were designed to do. French and German workers are also benefiting from wage subsidies and schemes that cut their shifts to part time, instead of laying them off completely. Schneider says that gives consumers the courage to go out there and spend a little. But some of the growth could be attributed to companies simply replacing stock after months of retrenching.
Overall, GDP across the eurozone dropped a tenth of a percent, as countries like Spain and Ireland continue to weigh down positive growth — a sign that Europe isn’t out of the woods just yet.
I’m Christopher Werth for Marketplace.
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