Weekly Economic Insights - 6 May 2019

Macro Highlights - 5/7/2019

Highlights of the week

Economist insights: Drop in the ISM indices, a strong employment report and status quo by the Fed in the US, stable growth y-o-y in the eurozone

United States

  • A slight deterioration in the economic outlook but a historical drop in the unemployment rate to 3.6% in April
  • As we had calculated two years ago, there is still room for the participation rate for the 25-55 age bracket to increase. This should contain wage and inflationary pressure

US Federal Reserve

  • The Fed maintained its key rate at 2.50% following its meeting on 1 May 2019, as expected
  • The FOMC expressed confidence with regard to the inflation outlook…
  • … which backs our scenario in which the Fed maintains a neutral bias and does not intend to precipitate monetary easing

Eurozone

  • Growth accelerated in Q1 2019 vs. the previous quarter but remained stable on a y-o-y basis at 1.2%, while unemployment dropped slightly to 7.7%
  • Inflation increased to 1.7%, above expectations, due mainly to the rise in the oil price, as well as higher services prices

Monthly Chartbook: Stabilisation of global growth and acceleration of inflation

  • Each month, we present the changes in the key indicators of our global macroeconomic scenario, as well as for the US, the eurozone and China
  • This month, there was a pause in the rise in the oil price, but the impact on purchasing power could be negative in Q2 in the eurozone and the US, as shown by Mathieu Grobéty in the specific case of Switzerland

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