The economy of the Eurozone has been weakening and is pretty close to contraction. Manufacturing and services have been in recession for quite some time and services seem pretty close to contraction, which would mean recession for the economy.

Although, we have seen some encouraging signs recently, such as the slight improvement in services PMI yesterday. It’s early to tell but at least the economic decline has stopped for now, or so it seems. November’s retail sales in particular was good. But, we saw a pickup in CPI (consumer price index) inflation as well. Below are the numbers:

Eurozone Retail Sales Report

• November retail sales +1.0% vs +0.7% m/m expected
• Prior -0.6%; revised to -0.3%
• Retail sales +2.2% vs +1.5% y/y expected
• Prior +1.4%; revised to +1.7%

Eurozone CPI Inflation Report

• Eurozone December preliminary CPI +1.3% vs +1.3% y/y expected
• Prior +1.0%
• Core CPI +1.3% vs +1.3% y/y expected
• Prior +1.3%

Core CPI remained unchanged at 1.3% as expected, but the headline inflation jumped 3 points to 1.3%, which is welcomed by the ECB. More importantly, the retail sales jumped 1.0% higher in November and October’s number was revised higher as well. The Black Friday might have had some impact, although not too big since Black Friday is not a big thing in Europe like in the US, so some positive data from Europe for a change.