Eurozone Q2 GDP gets a trade boost as growth accelerates to 0.6%

Eurozone Q2 final GDP +0.6% vs +0.4% q/q second estimatePrior (Q1) 0.0%The breakdownThe positive revision is definitely a welcome boost for euro area policymakers. That especially after the more stagnant momentum seen in Q1.The annual growth of euro area GDP even increased to 1.2%, beating the second estimate of 1.0% as well; much better than 0.3% in Q1 too.Looking at the details, trade was the dominant driver in adding 0.9% to euro area GDP growth. Household consumption helped a little by posting a 0.2% contribution, before being offset by a drag in investories - which subtracted 0.5% from Q2 GDP.All in all, the Q2 rebound looks stronger on the surface than underneath. Growth was heavily driven by exports and net trade rather than a broad acceleration in domestic demand, while investment remained soft.How does this compare to Q1 economic activity?Eurozone GDP was flat q/q in Q1, so the +0.4% expansion in Q2 marks a clear pickup in economic activity.What drove the improvement in economic performance?The recovery was broad but uneven. Spain (+0.7%) remained one of the stronger major economies, while Germany (+0.3%) and Italy (+0.2%) posted more modest growth.What does it say about the Eurozone economy?The economy regained momentum after Q1 stagnation, suggesting activity is holding up better than feared. However, growth remains moderate and uneven across member states.What does it mean for the ECB?The report shows the Eurozone economy holding up reasonably well, and even with the better revision, it offers little new information for policymakers. Markets are therefore unlikely to materially change ECB expectations on this release alone. This article was written by Justin Low at investinglive.com.