Eurozone inflation cooled in June, temporarily easing fears that the currency bloc’s economic reopening will underpin price growth, though economists expect the pressures to gather pace again in the second half of the year.

Consumer prices rose by 1.9 per cent from a year earlier, down from a more than two-year high of two per cent in May. The inflation rate had exceeded the European Central Bank’s target of “below, but close to” two per cent in May. Core inflation, a less volatile measure of inflation that excludes volatile items such as food and energy, slowed to 0.9 per cent. With businesses battling supply shortages, worries have increased in some quarters that steep price gains will start to become entrenched.

Meanwhile, German unemployment fell further in June as more workers joined the labour market in light of a strong recovery. This was helped by falling coronavirus infections and an easing of containment measures, data from the Federal Labour Agency revealed on Wednesday. The number of people out of work declined by 38,000 in June from the previous month, much more than the expected fall of 20,000.

The unemployment rate remained unchanged at 5.9 per cent in June, in line with expectations. Unemployment had decreased by 19,000 in May. COVID-19 cases have declined to their lowest level in months in Germany, allowing authorities to lift many restrictions, although they remain wary of the potential impact of the more contagious delta variant, whose share of new infections has been rising rapidly.

Finally, in the US, data published by the Commerce Department on Thursday points to a nation that has regained its footing quickly after being hit by the global pandemic. The US economy grew at a solid 6.4 per cent rate in the first three months of the year, setting the stage for what economists believe might be the strongest year for the economy in about seven decades. Growth in the gross domestic product, the country’s total output of goods and services, was unchanged from two previous estimates, the Commerce Department said, an acceleration from the 4.3 per cent pace of the fourth quarter.

Economists believe that economic growth has continued to accelerate in the second quarter, as vaccinations become widespread and Americans eager to get outside are being welcomed by newly-reopened businesses.

This article has been prepared by Bank  of Valletta plc for general information purposes only.