German Economic Data Has Been Astonishingly Bad

German economic data has been unquestionably bad in recent days.

Earlier today, we learned industrial production unexpectedly fell 0.5% year-over-year in June, missing expectations for a 0.3% gain. This was the first year-over-year decline since July 2013.

"June's year-over-year reading confirms the German industry is decelerating from a 5% annual growth peak reached in January," said Bloomberg's Maxime Sbaihi and Niraj Shah in a piece titled "No End in Sight for the German Industrial Slowdown."

"[T]he pace deceleration is worrying with the crisis in Ukraine adding further weakness," said Pantheon Macroeconomics' Claus Vistesen.

This report came hours before Russia announced a sweeping ban on food imports from the European Union.

Markets are down modestly in Europe with Germany's DAX down by 0.1%.

The industrial production report follows Wednesday's horrific factory orders report that showed orders unexpectedly plunged 3.2% month-over-month in June. Economists were expecting a 0.9% gain.

"Growth in new orders slumped at its fastest rate since September 2011, and the annual growth rate fell back to -4.3%," said Vistesen on Wednesday. "The German statistical office reports that while domestic orders remained unchanged, new orders from the euro area fell an astonishing -10.4% from the previous month. "

Vistesen noted that all these numbers can be volatile, and that Germany recovered from similar economic hiccups in 2003 and 2004.

"[B]ut if the smoothed growth rate drops below zero, it would be a clear sign of warning," he said.