U.S. still struggling, France and Germany on the move

Data released on Thursday pointed to the U.S. economy not yet nearing a strong rebound, but Western Europe’s two largest economies, France and Germany, demonstrated a surprising return to economic health in the second quarter.

Many experts had predicted the United States would lead the return to growth on global scale, but the world’s number one economy lagged behind its counterparts since its retail sector struggled to attract consumers.

Job losses and declines in the housing market have convinced many Americans to monitor their spending habits more carefully.

Americans are “in no position to drive a decent economic recovery,” according to Paul Dales, economist at Toronto’s Capital Economics.

But a soon to be U.S. recovery is still seen as a strong possibility, especially after the announcement claiming hedge fund manager John Paulson, a financial guru, had purchased shares of a selection of banks and drug makers.

An surprise second-quarter rise in GDPs in Germany and France, central to the euro zone economy, lifted financial markets.

German Economy Minister Karl-Theodor zu Guttenberg cautioned everyone: “There are no grounds for euphoria, because we’re still a long way from seeing the economy back at the level that it was at last year.”

Europe’s improvement will still be patchy at best, with Britain, Italy and the Netherlands showing weakness and parts of eastern Europe, reporting a far more serious outlook.

We would like to thank www.reuters.com for quotes used in this article.