All of the economic signals confirm that growth in the eurozone economy is going nowhere.
The eurozone manufacturing purchasing managers index plunged to a 13-month low of 50.7 in August, down from 53.8 in July. This was worse than the 50.8 expected by economists.
Any reading above 50 signals growth, and the eurozone's PMI is rapidly tumbling to that no-growth level.
"Although some growth is better than no growth at all, the braking effect of rising economic and geopolitical uncertainties on manufacturers is becoming more visible," Markit's Rob Dobson said. "This is also the case on the demand front, with growth of new orders and new export business both slowing in August."
We already know that GDP growth in the eurozone fell to 0.0% in Q2. However, the July and August data have suggested a failure to rebound in Q3.
"In one line: Alarming signs from the eurozone manufacturing sector," said Pantheon Macroeconomics' Claus Vistesen. "The downbeat economic news is intensifying."
Every Country Stinks
Vistesen pointed to the country-specific PMI reports, which were mostly worse than expected.
Germany, the eurozone's largest economy, saw its PMI fall to 51.4, which was worse than the 52.0 expected. Italy, the eurozone's third largest economy, saw its PMI plunge to a 14-month low of 49.8, missing expectations for 51.0.
Any reading below 50 signals contraction.
"Some marginal growth was still recorded on the output front, but the paring back of purchasing activity, inventories and employment would indicate that the recovery in the manufacturing sector has hit a roadblock," Markit's Phil Smith said of the Italy PMI report.
Vistesen characterized Italy's report as "a shocker."
France, the eurozone's second largest economy, fell to a 15-month low of 46.9 in August from 47.8 in July. Believe it or not, this print was actually better than the 46.5 expected by economists. However, it remains deep in contractionary territory.
"Sharply falling output led firms to cut back employment, purchasing and stock levels further in August," Markit's Jack Kennedy said of the France PMI report. "This sort of across-the-board weakness has been a common theme in recent months and there remains very little to suggest any turnaround in fortunes will be imminent."
More Stimulus From The ECB?
Eurozone consumer price growth fell to just 0.3% in August. Morgan Stanley's Joachim Fels characterized this as "dangerously close to the deflation threshold." Prices in Italy actually fell 0.2%.
This combination of deteriorating prices and stagnating economic activity puts increasing amounts of pressure on the European Central Bank to unleash more monetary stimulus. The next big move would be quantitative easing (QE), which is when a central bank goes buys up bonds in order to boost credit market liquidity and keep interest rates low.