by Calculated Risk on 5/24/2012 10:28:00 PM

First a little European gloom ... Note: US markets will be closed on Monday in observance of the Memorial Day, but the European markets will be open.

From the NY Times: European Economic Outlook Dims Amid Leaders’ Impasse

A Markit Economics index that tracks the European services and manufacturing sectors fell in May to 45.9 from 46.7, worse than economists surveyed by Reuters and Bloomberg had expected. An index reading below 50 suggests the economy is contracting. ...

Perhaps even more worryingly, German data released Thursday showed signs of a slowdown in an economy that until now had been a bright spot for the Continent. A Markit index based on surveys of purchasing managers of German manufacturing companies fell to 45.0 in May from 46.2 in April.

A separate report from the Ifo Institute, based on surveys of German companies, showed “greater pessimism about their business outlook,” and noted that the “recent surge in uncertainty in the euro zone is impacting the German economy.”

And from the NY Times: British Recession Is Worse Than Thought, Data Says

The Office for National Statistics revised the decline in gross domestic product in the first three months of this year to 0.3 percent, from the 0.2 percent it estimated last month, because of a deeper slump in the construction industry. Construction output dropped 4.8 percent from a year earlier, the agency said, not 3 percent, as it had estimated earlier.

The revised figures were “bad news for U.K. policy makers as it shows the economy faring even more badly than initially thought,” said Scott Corfe, senior economist at the Center for Economics and Business Research in London. “Indeed, the latest data show the U.K. economy performing worse than the euro zone economy, which saw zero growth at the start of the year — meaning the U.K.’s woes cannot even be fully attributable to the debt crisis embroiling the Continent.”

• Friday at 9:55 AM ET the final May Reuter's/University of Michigan's Consumer sentiment index will be released. The consensus is for no change from the preliminary reading of 77.8. The recent decline in gasoline prices might boost sentiment, although that might be offset by weaker job growth and European concerns. From MarketWatch: Gasoline prices add to the holiday cheer

The average price for a gallon of regular gas has fallen each day since May 16 and stood at $3.676 on Thursday, according to AAA data. That is down 17 cents from a month ago.