The European economy grew at a faster pace than the United States’ for the first time in three years during the first quarter, as Europe experienced 0.9% annualized growth and the U.S. economy grew at a 0.1% annualized rate. European economic growth was below consensus expectations in the first quarter, however, it was the second consecutive quarter of positive economic growth in Europe and provided further evidence that Europe’s post-debt-crisis recovery remains on track.
Despite the strong start to 2014, growth in Europe is likely to trail the U.S. in the second quarter. Europe had a mild winter, which provided a boost to economic activity and that factor will likely fade in the second quarter. Conversely, U.S. economic activity is likely to rebound after a historically cold winter. Additionally, the crisis in Ukraine is likely to negatively impact consumer and business confidence throughout the Eurozone and negatively impact economic activity.