Germany’s ZEW investor confidence index rose sharply in April, raising hopes of a rebound in the eurozone’s largest economy. However, a sharp deterioration in the current assessment suggest that the outlook is set to remain underwhelming in the near future.
A measure of the economic prospects in Germany for the next six months rose to 3.1 in April from -3.6 in March, exceeding estimates. Although the indicator remains below the long-term average of 22.2 points, economic expectations have recovered significantly from their low in October 2018, having climbed almost 28 points since then, ZEW said.
The current situation index of the survey, however, plummeted to 5.5 in April from 11.1 in March, the weakest point since November 2014, when it came in at 3.3. Economists forecasted a reading of 8.5.
Meanwhile, in its latest report on economic conditions around the country, known as the Beige Book, the US Federal Reserve said economic activity expanded at a slight-to-moderate rate in March and early April, in spite of uncertainty caused by international trade tensions and severe flooding in the Midwest.
The central bank said some districts reported a slight strengthening following a slowdown this winter. But weakness remained, especially sluggish consumer spending, which accounts for two-thirds of economic activity. The report also found that prices remained low for many farm products.
The Beige Book findings will form the basis for discussion when central bank policymakers meet at the end of April to discuss interest rates.
Finally, in the UK, total pay growth maintained its strong upward momentum in the three months to February, growing at the fastest rate in over a decade.
Total pay, including bonuses, in the quarter ending February, rose 3.5 per cent on an annual basis, the Office for National Statistics said last week. This figure matched economists’ forecasts and was the joint highest rate since mid-2008.
Average weekly pay, excluding bonuses, rose by 3.4 per cent compared with the same period last year. This was also in line with estimates but slightly slower than the 3.5 per cent increase in the three months to January.
Britain’s labour market has defied Brexit fears as employers increased hiring in the run-up to a possibly chaotic Brexit.
This report was compiled by Bank of Valletta for general information purposes only.