German unemployment continued to decline in April as the labour market in Europe’s largest economy improved further. The Federal Labour Agency said the unemployment rate fell to 5.8 per cent in April from 6.0 per cent in March, the lowest level since German reunification in 1990 and in line with analysts’ expectations.

The number of unemployed people declined by a seasonally adjusted 15,000 to 2.543 million in April. The reading exceeds economists’ expectations for a decline of 11,000. ING economist Carsten Brzeski said that survey indicators imply that the positive trend will persist and that the labour market will remain a significant growth driver for the whole economy.

Meanwhile, in the US, the Federal Open Market Committee voted unanimously to retain its benchmark interest rate at 0.75 per cent to one per cent. Policymakers left interest rates unchanged and slightly downgraded its economic outlook but downplayed latest weakness, while leaving open the possibility of a June rate hike.

Federal Reserve officials took a cautious approach to further tightening, as in the first quarter, economic growth was slow, job growth fell and core inflation remained subdued. Fed officials are anticipating two more rate hikes in their 2017 forecasts in addition to the increase made in March, as “the fundamentals underpinning the continued growth of consumption remain solid”. The Federal Reserve said it anticipates to increase rates “gradually” and that risks to its economic outlook “appear roughly balanced”.

Finally, according to data published by IHS Markit, the UK construction sector growth improved unexpectedly in April. Civil engineering activity was the best-performing sub-category, with the highest rate of expansion since March 2016, while growth in house-building hit a four-month high.

The Chartered Institute of Procurement & Supply/Markit Purchasing Managers’ Index rose to 53.1 in April from 52.2 in March. Economists had been expecting the index to fall to 52.0. A reading above 50 indicates expansion in the sector while a reading below that threshold signals contraction.

This report was compiled by Bank of Valletta plc for general information purposes only.