Sat Apr 19th, 2008 at 10:37:51 AM EST
(Title stolen from ThatBritGuy.)
Many on ET have noticed how the Anglo-Saxon business media consistently reports economic news from continental Europe with the most negative spin, picking out the worst, and gives positive spin to news from home. (Nay -- all the business media do it, and so do analysts and economiists in the real economy.)
Here is yet another egregious example - I give you the latest Eurozone external trade numbers as reported by Bloomberg, and then do counter-spin:
European January Exports to U.S. Flat After 2007 Drop
By Fergal O'Brien
Euro-area shipments to the U.S., which dropped in 2007 for the first time in four years, were flat at 15.4 billion euros ($24.6 billion) in the first month of 2008, the European Union's statistics office in Luxembourg said today. Exports to the U.K. rose 5 percent, while sales to Russia and China jumped 25 percent.
So exports to one main trade partner flat, that to three others with massive jumps, what do you pick as headline?... But wait, it gets better.
The euro reached a record near $1.60 against the dollar yesterday after European inflation data lessened the prospect of a European Central Bank interest-rate cut. That is adding to pressure on manufacturers trying to ship products into a U.S. economy teetering on the brink of a recession. France's Airbus this week said the euro's level is ``becoming unbearable.''
``A lot of the growth in the euro zone has been very much dominated by Germany and in particular trade,'' said Mitul Kotecha, head of foreign-exchange research at Calyon in London. ``Going forward, it's going to be quite risky. The reality is we're going to see some deterioration in trade and the strong euro is going to start to play a more negative part.''
So not only are exports to the USA the only ones that count, but maintaining exports there despite steadily less advantageous exchange rates = deterioration?... (And they quote an airline as evidence, airlines having trouble with oil prices too.)
Now, if you don't ask analysts in London, but check the actual Eurostat press release [pdf!], the news is - something completely different:
The first estimate for the euro area¹ (EA15) trade balance with the rest of the world in February 2008 gave a 0.8 bn euro surplus, compared with -1.6 bn in February 2007.
In other words, in February, the Eurozone's economy improved to have a trade surplus in place of a deficit over one year -- a period over which the Euro appreciated relative to the dollar by about 14%. What's more:
The January 2008² balance was -11.0 bn, compared with -7.3 bn in January 2007. In February 2008 compared with January 2008, seasonally adjusted exports rose by 2.0% while imports fell by 0.4%.
So after seasonal adjustion, compared with last month, trade balance improved again, even in relative terms.
The positive annual and seasonally adjusted month-on-month changes are reciprocated by the E-27, too:
The first estimate for the February 2008 extra-EU27¹ trade balance was a deficit of 15.3 bn euro, compared with -17.5 bn in February 2007. In January 20082, the balance was -31.2 bn, compared with -26.0 bn in January 2007. In February 2008 compared with January 2008, seasonally adjusted exports rose by 3.3% while imports fell by 0.7%.
Note that unlike in the Eurozone, the improvement here was merely a reduction of the trade deficit. Wonder why?
Concerning the total trade of Member States, the largest surplus was observed in Germany (+17.1 bn euro in January 2008), followed by the Netherlands (+3.2 bn). The United Kingdom (-12.1 bn) registered the largest deficit, followed by Spain (-9.1 bn), France (-5.5 bn), Italy (-4.1 bn) and Greece (-2.9 bn).
Why don't analysts in London talk about that? Sitting in a country less affected by an appreciating currency, with the Euro also making records vs. the Pound?
In the tables of the press release, noteworthy:
- In January 2008 vs. January 2007, 25% growth of Eurozone exports to China are contrasted by import growth of only 9% (though in absolute numbers, that's still a minor increase of a massive trade deficit);
- If you check trend in seasonally adjusted numbers, there was a low point in December, with two months of improvements after, for both the Eurozone and the EU-27;
- France's extra-EU-27 trade deficit turned a surplus (those with big deficits there are the Netherlands, the UK, Spain and Belgium - guess the only one with no improvement from January to February!). Italy, too, has its big trade deficits intra-EU.