Unemployment across the euro zone hit a record low, just a week before the European Parliament elections and the European Central Bank's next meeting to decide on interest rates.
The unemployment rate in the 20-nation eurozone fell to 6.4% in April from 6.5% in March. The unemployment rate is forecast to remain constant at 6.5%.
The number of unemployed people is down by 100,000 since March. Compared to the same period last year, the number of unemployed people is down by 101,000. The youth unemployment rate fell to 14.1% from 14.3% a month ago.
“Strong jobs markets and strong wage growth are helping to restore purchasing power after an inflation spike, supporting the economic recovery,” said Bert Collin, senior euro zone economist at ING.
Meanwhile, the Federal Reserve's Beige Book survey of local businesses showed that the U.S. economy expanded “moderately or moderately” in most regions from early April to mid-May and that consumers were not hampered by rising prices.
The survey, released roughly every six weeks, was released Wednesday as Fed policymakers, who have kept rates steady at a range of 5.25% to 5.50% for the past 10 months, remain uncertain about when they will start cutting rates and are closely monitoring developments in economic activity, employment and price pressures to make a decision.
Meanwhile, housing demand is growing and construction is rising modestly, even as high interest rates continue to restrain credit growth. However, there are still reports of rising mortgage rates impacting sales activity, the report added.
Finally, German inflation rose slightly in May, highlighting the challenges for the ECB ahead of its interest rate decision on June 6th.
Inflation in Germany, Europe's largest economy, rose to 2.8% in May, slightly above expectations, from 2.4% the previous month. Economists had expected inflation to rise to 2.7%, based on harmonized data for comparison with other EU countries.
The rise in German headline inflation is a stark reminder of the ECB's final challenge in returning inflation to its 2% target sustainably.
This article does not constitute legal and/or financial advice and has been published for information purposes only by Bank of Valletta plc, 58, Zachary Street, Valletta. Bank of Valletta is a public limited company regulated by the MFSA and authorised to carry out banking and investment services activities under the Banking Act (Chapter 371 of the Laws of Malta) and the Investment Services Act (Chapter 370 of the Laws of Malta).
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