Take Two: US growth eases more than expected; Eurozone business activity accelerates
- 29 April 2024 (3 min read)
What do you need to know?
US first quarter (Q1) GDP growth slowed to an annualised rate of 1.6% from 3.4% in Q4, below market expectations of 2.5%, reflecting a deceleration in consumer and government spending and net exports. The personal consumption expenditures index – the Federal Reserve’s (Fed) preferred measure of inflation - rose 3.4% in Q1 from 1.8%, raising doubts about how quickly the Fed will be able to cut interest rates. Meanwhile US business activity continued to increase in April though at a slower rate, reflecting weaker demand, flash Purchasing Managers’ Index (PMI) data showed. The US composite PMI fell to 50.9 from 52.1 – a reading above 50 indicates expansion.
Around the world
Eurozone business activity grew at its fastest pace in 11 months in April, driven by robust service sector growth despite a continued manufacturing downturn. The bloc’s composite PMI rose to 51.4 from 50.3 in March, though the manufacturing index remained weak at 45.6, down from 46.1. Service sector inflation rose, data provider S&P said, though the European Central Bank is still expected to cut interest rates in June. Meanwhile the UK’s FTSE 100 index reached a new record high boosted by company earnings reports and hopes that the Bank of England will start cutting rates in August.
Figure in focus: 17 million
Electric car sales could reach 17 million in 2024 - accounting for more than one in five cars sold worldwide - after growing 25% year-on-year in Q1, the International Energy Agency (IEA) predicted. Competition between manufacturers, falling car and battery prices and ongoing policy support are expected to continue driving sales despite high inflation, volatile battery metal prices and the phase-out of purchase incentives in some countries. Public charging infrastructure needs to keep pace with sales and needs to increase sixfold by 2035, it said.
Words of wisdom
Solar for All – A US initiative to help low-income communities benefit from renewable energy by funding solar power projects around the country. President Joe Biden announced $7bn of investment in the scheme, expected to create some 200,000 jobs and generate around $8bn of energy bill savings for households. It also aims to cut 30 million metric tons of carbon dioxide equivalent emissions. The announcement coincided with Earth Day, an annual event which began in 1970 to demonstrate support for environmental protection.
What’s coming up?
On Monday, a spate of Eurozone surveys including the latest Economic and Industrial Sentiment and Consumer Confidence indices will be issued. On Tuesday, China will publish its latest PMIs while the Eurozone reports Q1 GDP growth and April inflation data. On Wednesday, the Fed convenes to set interest rates. The Bank of Japan releases its latest monetary policy meeting minutes on Thursday, while the US issues employment figures on Friday.
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