Inflation in the US accelerated during April as consumer prices rose at their fastest pace in more than 12 years as the economic recovery kicked into gear and energy prices jumped higher, the Labour Department reported on Wednesday.
The Consumer Price Index (CPI), which measures a basket of goods as well as energy and housing costs, rose to 4.2 per cent in April from the same month last year. Economists had expected a 3.6 per cent increase. Compared to the previous month, prices rose by 0.8 per cent, blowing by expectations of a 0.2 per cent rise. The increase in the annual headline CPI rate was the fastest since September 2008, while the monthly gain in core inflation was the largest since 1981.
A separate report showed that producer prices spiked 6.2 per cent for the 12 months ended in April, marking the largest increase since the data series began in 2010.
Meanwhile, eurozone industrial production rose much less than expected in March, with month-on-month growth hampered by a decline in the output of capital and durable consumer goods, data showed on Wednesday. The EU’s statistics office Eurostat reported that industrial output in the 19 countries that share the euro rose by 0.1 per cent month-on-month for a 10.9 per cent year-on-year surge. Analysts had predicted a 0.7 per cent monthly rise and a 11.6 per cent annual gain.
“The small rise in eurozone industrial production in March suggests that the region’s manufacturing sector is still far from back to normal, as persistent supply shortages outweigh strengthening demand,” Capital Economics economist Jessica Hinds said.
Finally, investor sentiment in Germany reached its highest level in more than two decades in May thanks to the tailing off of the third wave of the COVID-19 pandemic, a survey showed on Tuesday. The ZEW economic research institute said that its survey of investors’ economic sentiment surged to 84.4 points from 70.7 in the previous month. Economists had forecast a rise to 72.0.
The survey results point to a significant upswing in Europe’s largest economy in the coming six months.
“The economic outlook for the euro area and the US has improved considerably as well, ZEW president Achim Wambach said.
This article was prepared by Bank of Valletta plc for general information purposes only.