Eurozone and US Economies Show Signs of Moderate Acceleration

Recent economic data indicates a moderate acceleration of growth in both the Eurozone and the United States. Manufacturing activity is recovering in the Eurozone, while the US economy continues to be driven by strong consumer spending despite a recent government shutdown.

Eurozone – Production Recovery and PMI Above 50 Points

The Eurozone experienced an improvement in business sentiment in February, largely due to a recovery in the production sector. The overall Eurozone Purchasing Managers’ Index (PMI) rose to 51.9 points from 51.3 points at the beginning of the year. Notably, the manufacturing PMI exceeded the 50-point mark for the first time in six months, reaching 50.8 in February, driven by an increase in new orders. Improvements in the Eurozone services sector were more moderate, with the sentiment index remaining near January levels at 51.8 points.

A significant factor in the Eurozone’s improvement was the return of optimism in the German manufacturing sector. Germany’s PMI index surpassed 50 points for the first time since June 2022, registering 50.7 in February. This positive trend was fueled by increased new orders from both domestic and international customers, potentially signaling a cyclical turning point for the sector. The overall Eurozone PMI level suggests moderate GDP growth. Analysts polled by Bloomberg predict quarterly GDP growth of 0.3-0.4% in the coming quarters.

US GDP – Growth Hampered by Government Shutdown, but Consumption Remains Strong

US GDP grew by 1.4% in the fourth quarter of 2024 (0.4% quarterly), falling short of analyst expectations. The US Census Bureau estimates that the over 40-day government shutdown reduced annualized quarterly GDP growth by approximately 1 percentage point. However, this negative impact is expected to be temporary and reverse in the next quarter.

Private consumption remained the primary driver of US economic growth at the end of the year. Increased household spending on services fully accounted for the demand increase, while demand for goods remained stable compared to the third quarter. Investments in equipment and intellectual property continued to grow, but investment in housing declined for the third consecutive quarter. Despite this, increased buyer interest in new homes emerged towards the end of the year, aided by decreasing mortgage rates and home prices.

On an annual basis, the US economy grew by 2.2% in the fourth quarter, and overall growth for 2025 was likewise 2.2% (compared to 2.8% in 2024). In 2025, household demand and investments in the technology sector were the largest contributors to GDP growth, while investments in other segments decreased and foreign trade had a negative impact.

Forecasts for US growth continue to improve, with Bloomberg-polled analysts expecting the US economy to grow by 2.4% in 2026.

US Industry – Fastest Rise Since February Last Year

The US industrial sector began the new year with positive momentum. In January, output increased by 0.7% month-on-month, marking the fastest growth since February of the previous year. This growth was primarily driven by a 0.6% increase in manufacturing output and increased utility services due to colder weather. The extractive industry saw a slight decrease in volume, marking its fourth consecutive decline in the last six months. US oil production decreased slightly to 13.7 million barrels per day, compared to 13.8 million barrels per day at the start of the year. US production in January was 2.3% higher than a year ago, representing the fastest growth since September 2022 (2.4% in the industrial sector).

This acceleration in sector growth aligns with a significant improvement in US manufacturer sentiment at the beginning of the year.