Weekly Economic Insights - 1 July 2019

Macro Highlights - 7/3/2019

Highlights of the week

Economist insights: Household consumption remains strong in the United States

United States

  • Private consumption remained strong in April and May, with y-o-y growth averaging 2.7% over the two months
  • The acceleration in credit growth, strong consumer confidence, weak inflation and a solid labour
  • market should continue to support household spending
  • The 2.7% rise in consumption that we anticipate in 2019, after 2.6% in 2018, could notably limit the slowdown in GDP growth to 2.7% in 2019

Monthly Chartbook: After a sharp drop in inflation expectations, stabilisation in the US

  • 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, we analyse the drop in inflation expectations since the month of May, which reflects the sharp deterioration in global growth forecasts despite the dovish tone of central bankers

Last-minute news: The US and China announce a new trade truce

  • During a meeting held alongside the G20 summit on 28-29 June in Japan, the US and Chinese presidents agreed on a new truce in the trade war
  • For the time being, Donald Trump should not raise tariffs on the remaining imports from China not already targeted
  • However, the tariff increases decided on in May will still apply and thus weigh on world trade, as we described in our most recent Summer 2019 Macro Forecasts publication
  • The truce backs our scenario of a moderate slowdown in world GDP growth

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