While there are some clouds gathering over the economy, we do not currently see a storm. Despite the increased cost of living and the devastating war at the door of Europe, the economic activity in the euro area expanded further in the first quarter. The incoming high frequency and first hard data also bode quite well for the second quarter.
In particular, the number of people employed in the euro area is at a record high, and the unemployment rate hit new low in May. The Eurozone Purchasing Manager Index (PMI) declined somewhat in May but still signals growth.