Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Economic News Late May: More Dark Clouds With The Latest European Economic News

The European economic picture has grown steadily darker this week as surveys showed manufacturing and business activity is deteriorating in major European economies. So what's the latest European economic data?

For starters, private-sector output across the 17-nation euro zone fell in May at its sharpest pace since mid-2009. Specifically, the composite Purchasing Manager Index (PMI) compiled by Markit, gave a preliminary "flash" reading that was down to 45.9 from April's figure of 46.7 - the lowest reading since June 2009. Since a reading above 50 signals growth of activity compared with the previous month while a figure below 50 points to contraction, this signals that demand in Europe is falling.

Data also showed that private-sector activity in Germany returned to contraction in May as the country's composite index fell to 49.6 in May from 50.5 while the Ifo Institute's gauge of German business confidence fell more than expected to a six-month low at 106.6.

Meanwhile, first quarter European GDP was flat after a 0.3% quarterly drop in the final three months of last year. That's actually good news given that two consecutive quarters of shrinking GDP is considered a recession. On another bright note: The German economy bounced back from a 0.2% fourth-quarter contraction to produce first quarter growth of 0.5%. However, both the PMI and Markit surveys indicate that German GDP growth will likely decelerate considerably in the second quarter.

In addition and just outside the Eurozone, Britain's economy contracted by 0.3% between January and March and the country is second recession since the 2007-2008 financial crisis thanks in part to having Europe as its biggest trading partner.

The ongoing and seemingly never ending debt crisis is also producing "uncertainty shock" in the sense that European consumers and businesses are postponing major investment and spending decisions. With talk of a Greece exit becoming more and more serious, there will be no letup of the "uncertainty" in the near future. Moreover, Euro has also taken a beating and has just touched a two-year low of $1.25 against the US dollar - its lowest level since July 2010.

So what does all of this gloom in Europe mean for stock investors? Obviously, if you own or trade European stocks, you may already be feeling some pain while investors in big MNCs like Mcdonalds (NYSE:MCD) should be aware of just how much European exposure these stocks have. Hence, it's a good idea to watch any of the headlines coming out of Europe as well as to keep an eye on your stock forecasts for any stock you own that has significant European exposure.