NEW YORK • Economic reports released on both sides of the Atlantic last week painted very different pictures of how the United States and Europe are recovering from the pandemic.
The lesson: Along with vaccines, it pays to unleash enormous amounts of public money in the face of a livelihood-destroying health crisis. Europe provided less relief and ended up in a double-dip recession in the first three months of the year. This was confirmed on Friday by an official estimate showing the euro zone contracted by 0.6 per cent.
That came a day after the US disclosed that its economy expanded by 1.6 per cent over the same period, after substantial public expenditures aimed at stimulating growth.
The recession in the 19 nations sharing the euro currency reflects far less aggressive stimulus spending and a botched effort to secure vaccines that has left many major economies contending with continued restrictions on daily life.
"It's quite hard to see growth when most European countries are still facing restrictions," said Mr Angel Talavera, lead euro zone economist at Oxford Economics in London. "The US is going to grow more this year. The sheer amount of fiscal stimulus is going to create a boom."
Still, economic growth figures are a snapshot of the past, and recent weeks have produced encouraging signs that Europe is already on the mend.
The alarming spread of the coronavirus in major economies like Germany and France has moderated, while factories have revived production. Growing numbers of people are travelling through European cities, eager to spend money saved while they were sequestered at home during the worst of the pandemic.
"We are already where the arrows have pointed up once again," said Ms Kjersti Haugland, chief economist at DNB Markets, an investment bank in Oslo.
The German economy diminished by a sharp 1.7 per cent from January to end-March, but that was better than anticipated, prompting some economists to forecast a speedier recovery in Europe's largest economy.
The initial lockdowns last year punished Europe's economies, bringing large swathes of commercial life to a halt. But the current restrictions are calibrated to reflect improved understanding of how the virus spreads.
Rather than closing altogether, restaurants in some countries are serving takeaways and meals on patios. Roofers, carpenters and those in other skilled trades have resumed work outdoors.
"We have sort of learnt to live with the pandemic," said Mr Dhaval Joshi, chief strategist at BCA Research in London. "We are adapting to it."