Euro area economic activity jumps to 15-year high

Bloomberg

The euro area’s private-sector economy is growing at its fastest pace in 15 years as coronavirus restrictions are loosened across the region.
Surveys of purchasing managers by IHS Markit showed businesses struggling to keep up with demand in June as slowing infection rates allowed services including restaurants to reopen after months of strict lockdowns.
Confidence in the economic outlook rises to the highest level since sentiment data were first recorded in 2012. The European PMIs contrasted with Japan, where a similar survey showed private-sector activity contracting, led by services. Some business restrictions remain in place there to prevent flareups of the virus as nation prepares for the Tokyo summer Olympics next month. A gauge for the US will be released later on Wednesday.
The uptick in European services growth was especially pronounced in Germany, the region’s largest economy. German manufacturers also saw the first signs that the worst may be over for a supply squeeze, with a fall in the number of producers reporting longer lead times and rising materials prices.
Still, the region as a whole is suffering growing pains. Average prices charged for goods and services rise at by far the fastest pace since comparable data for both sectors were first available in 2002. Warehouses are increasingly depleted, and staffing pressures remain high, which is expected to put further upward pressure on inflation in the coming months.
Some ECB  officials have warned of upside risks to the inflation outlook, though President Christine Lagarde earlier this week repeated the view that the price pressures will be temporary. The ECB decided this month to continue its elevated pace of monetary stimulus.
ECB Vice President Luis de Guindos echoed Lagarde’s line at an event on Wednesday, while saying the euro area is likely to see “very significant” economic growth in the second half of the year.
“The data set the scene for an impressive expansion of GDP in the second quarter to be followed by even stronger growth in the third quarter,” said IHS Markit Chief Business Economist Chris Williamson.