Europe grows but still lags

The monthly indicators from the EU Commission showed a sharp jump in the index of sentiment for the region. But even with the sharp monthly jump in March - a jump that is in the top ten percentile of all monthly jumps in the index - the indices remain at very weak levels.

The EU index remains in the the 41st percentile of its queue implying that it is stronger than its current level nearly 60% of the time.

Despite the good performance in the monthly EU indices the situation there is is still troubled. While there was a large jump in the EU/EMU index for the month there had also been bad weather in Europe early in the year. This report could reflect some bad weather catch-up of the sort we are looking for in the US data for March. We should not conclude that Europe is authentically carrying so much momentum in March. We should bear in mind the still low readings of the EU indices as well. Europe's recovery is still a long way off.