Eurozone industrial production contracted once again in July, tumbling to -1.5 per cent on the month from +0.6 per cent in June and missing the consensus prediction of +0.1 per cent.

This fall means that, even if production posts a monthly rise of around one per cent in both August and September, it would still roughly stagnate in the third quarter as a whole, after rising by a downwardly revised 0.6 per cent in the second quarter.

But such a rebound is by no means guaranteed. After all, the pick-up in production in the second quarter did not appear to be fully matched by an upturn in demand.

Furthermore, despite their recent improvement, the industrial surveys remain consistent with stagnant production in the near term. In all, then, the numbers provide an early indication that the eurozone economy is unlikely to have gathered more momentum in the third quarter and may even have lost some momentum.

Meanwhile, the UK’s headline unemployment rate unexpectedly fell to 7.7 per cent in the three months to July, from 7.8 per cent in the three months to June. Economists had anticipated no change in the unemployment rate.

The claimant count rate dropped from 4.3 per cent to 4.2 per cent in July. Again, no change was expected.

The July data shows that the unemployment rate moved a step closer to the threshold at which Bank of England Governor Mark Carney has said officials will reassess their policy stance. The 7.7 per cent unemployment rate is the lowest since the September-November 2012 period. Unemployment was last at seven per cent or lower in the quarter through to February 2009.

Finally, in the US, non-farm employment rose less than anticipated in August and gains for the previous two months were revised down. This indicates that the economic expansion is struggling to gain momentum.

The US economy added 169,000 workers last month, falling behind the 180,000 forecasted in a Bloomberg News survey. The unemployment rate fell to 7.3 per cent, the lowest since December 2008, as discouraged workers left the workforce. The US economy needs bigger increases in employment to propel consumer spending, which accounts for 70 per cent of overall output.

This report was compiled by Bank of Valletta for general information purposes only.