The economy of the United States and Europe
2023-05-04
■Although the impact of financial tightening has strengthened, personal consumption remains strong in the US economy.
■The European economy, within the entire eurozone, is supported by the service industry for economic growth.
The real GDP growth rate from January to March (preliminary data, 1.1% year-on-year growth over the previous quarter) slowed down for the second consecutive quarter. In terms of demand, personal consumption expenditure (PCE) has grown strongly, while investment in equipment and housing is still declining, indicating that the impact of fiscal tightening is gradually strengthening. In addition, the core PCE inflation rate (up 4.9% year-on-year) has significantly increased, and inflationary pressure has strengthened, reaching the highest level in a year.
The consumer trust index in April (101.3, a decrease of 2.7 percentage points month-on-month) reached a 9-month low due to a significant decrease in expectations. Observing the details of the expectation index is mainly influenced by the pessimistic outlook of the business environment and labor market. However, there has been no significant change in income expectations compared to last month. In addition, the current index has been rising for two consecutive months, indicating that the current consumption environment and short-term income prospects remain stable.
From January to March, the real GDP growth rate of the euro area (preliminary quick report, 0.1% month-on-month growth, 1.3% year-on-year growth) achieved positive growth for two consecutive quarters, indicating that despite the slow pace, the trend of economic expansion continues. In terms of major countries, although Germany achieved zero growth, the growth rate of many countries such as France, Italy, and Spain have accelerated.
The prosperity index of the Eurozone in April was 99.3, an increase of 0.1 points compared to the previous month. Although it has slightly increased since the beginning of the year, it is still in a stagnant state. The prosperity index by industry shows that the manufacturing industry index is negative 2.6, falling for three consecutive months to the lowest level since January 2021, while the service industry index has risen to 10.5, the highest level in three months. The deterioration of the manufacturing industry continues, while the service industry has become a supporting force for the economy.
In April, the German Ifo Business Prosperity Index (93.6, an increase of 0.4 percentage points from the previous month) has been continuously rising for 6 months. Although the current situation index has slightly decreased, the expected index is still rising. In major industries, the operating conditions of the manufacturing industry continue to improve, but the improvement in the operating conditions of the service industry has slowed down since November last year.
■The European economy, within the entire eurozone, is supported by the service industry for economic growth.
The real GDP growth rate from January to March (preliminary data, 1.1% year-on-year growth over the previous quarter) slowed down for the second consecutive quarter. In terms of demand, personal consumption expenditure (PCE) has grown strongly, while investment in equipment and housing is still declining, indicating that the impact of fiscal tightening is gradually strengthening. In addition, the core PCE inflation rate (up 4.9% year-on-year) has significantly increased, and inflationary pressure has strengthened, reaching the highest level in a year.
The consumer trust index in April (101.3, a decrease of 2.7 percentage points month-on-month) reached a 9-month low due to a significant decrease in expectations. Observing the details of the expectation index is mainly influenced by the pessimistic outlook of the business environment and labor market. However, there has been no significant change in income expectations compared to last month. In addition, the current index has been rising for two consecutive months, indicating that the current consumption environment and short-term income prospects remain stable.
From January to March, the real GDP growth rate of the euro area (preliminary quick report, 0.1% month-on-month growth, 1.3% year-on-year growth) achieved positive growth for two consecutive quarters, indicating that despite the slow pace, the trend of economic expansion continues. In terms of major countries, although Germany achieved zero growth, the growth rate of many countries such as France, Italy, and Spain have accelerated.
The prosperity index of the Eurozone in April was 99.3, an increase of 0.1 points compared to the previous month. Although it has slightly increased since the beginning of the year, it is still in a stagnant state. The prosperity index by industry shows that the manufacturing industry index is negative 2.6, falling for three consecutive months to the lowest level since January 2021, while the service industry index has risen to 10.5, the highest level in three months. The deterioration of the manufacturing industry continues, while the service industry has become a supporting force for the economy.
In April, the German Ifo Business Prosperity Index (93.6, an increase of 0.4 percentage points from the previous month) has been continuously rising for 6 months. Although the current situation index has slightly decreased, the expected index is still rising. In major industries, the operating conditions of the manufacturing industry continue to improve, but the improvement in the operating conditions of the service industry has slowed down since November last year.