A minor miracle in the making

4 January 2006 By Edward Hadas Follow @edwardhadas

The region is enjoying the fruits of labour reform higher production but no pressure on wages. That s unusually supportive for profits. But the equity market has not fully caught on, despite a strong 2005. Compared to the US, eurozone stocks look attractive.

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The eurozone manufacturing purchasing managers' index rose from 52.8 to 53.6 in December. Any number above 50 indicates expected expansion. The reading was the highest since August 2004, when the index was declining. The index has been rising since May 2005. The jobs component of the index was above 50 for the first time since May 2001. It has been increasing since June 2003, with a plateau in the first half of 2005.

The number of unemployed in Germany fell by 110,000 to 4.63m. The decline brought the unemployment rate down from 11.4% to 11.2%. The German Labour Office attributed much of the decline to unseasonably warm weather and an unusually early survey date. The ILO index for November, the latest available showed a 15,000 increase in employment.

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