Key facts
- Eurozone inflation hit 3.2% year-over-year in May.
- Eurozone core inflation rose to 2.5% year-over-year in May.
- Turkey's annual inflation rate reached 73.5% in May.
- US nonfarm payrolls increased by 172,000 in May.
- The US unemployment rate held steady at 4.3% in May.
- US core CPI accelerated to 2.5% year-over-year in May.
- Eurozone Q1 GDP contracted by 0.2%.
- Japan's real wages increased 1.9% year-on-year in April.
- Brazil's oil production reached a record 4.334 million barrels per day in April.
- Spain's registered unemployment fell by 36,300 in May.
- France sold €13.998 billion in long-term government bonds.
Global economic data presents a complex picture, with inflation figures varying significantly across regions. In the Eurozone, preliminary May Consumer Price Index (CPI) rose 3.2% year-over-year, matching expectations, while the core CPI increased to 2.5%, surpassing the forecast of 2.4%. Energy costs saw a substantial 10.9% inflation rate, and services prices increased by 3.5%. These figures strengthen the case for a potential rate hike by the European Central Bank. However, Eurozone Q1 Gross Domestic Product (GDP) contracted by 0.2%, missing forecasts of 0.1% growth and reversing the previous quarter's growth. Despite the economic contraction, Q1 employment grew by 0.5%, meeting expectations, and Eurozone unemployment remained unchanged at 6.3% in April. Loans to non-financial corporations in the Eurozone grew by 3.4% in April, surpassing forecasts, indicating a stronger-than-expected borrowing appetite among businesses. Services production in the euro area rose by 0.2%.
Turkey's annual inflation rate surged to 73.5% in May, exceeding economists' expectations and marking another month of climbing prices. This acceleration is influenced by a global energy shock linked to the US-Israeli conflict involving Iran, posing a challenge for policymakers ahead of an interest-rate decision. In contrast, the Philippines saw its CPI inflation decelerate to 6.8% year-over-year in May, down from 7.2% in April and below analyst forecasts. This slowdown was driven by lower price growth in transport, food, and housing, though the Bangko Sentral ng Pilipinas plans to proceed with a rate hike. Ghana's annual inflation rate increased to 3.7% in May, driven by food prices, while the Bank of Ghana anticipates inflation to rise within its target band. Switzerland's annual inflation rate remained unchanged at 0.6% in May, with monthly CPI rising 0.2%, below forecasts. The strong Swiss franc continues to exert deflationary pressure. Sweden's preliminary inflation figures for May indicate an upward trend, with details pending. Peru recorded negative monthly inflation in May, though the annual rate remains close to 4.0%. In the Netherlands, inflation climbed to 3.5% in April, its highest in a year.
The United States labor market demonstrated resilience. Nonfarm payroll jobs increased by 172,000 in May, exceeding expectations, with the unemployment rate holding steady at 4.3%. Average hourly earnings rose 0.3% month-over-month and 3.4% year-over-year, with April's figures revised upward. Private sector employment increased by 122,000 in May, exceeding forecasts, and job gains were broad-based. Average weekly hours remained at 34.3 in May, and average hourly earnings rose 3.4% year-over-year, slowing from April's 3.6%. US Core CPI for May rose to 2.5%, exceeding the forecast of 2.4% and accelerating from 2.2%. The ISM manufacturing PMI for May rose to 54, supporting a hawkish Federal Reserve outlook.
Other notable economic developments include Japan's real wages increasing 1.9% year-on-year in April, marking the fourth consecutive monthly gain, which supports a potential Bank of Japan interest rate hike. Nominal wages rose 3.5%, the fastest growth since December 2024, while inflation eased to 1.5%. Canada's Ivey PMI increased to 58.2 in May, reaching an 8-month high, with the adjusted prices index rising to 78.0, indicating increased inflation pressures. Canada's composite PMI rose to 52.3 and services PMI to 54.2. Brazil's oil production hit a record 4.334 million barrels per day in April. Australia's MI Inflation Gauge registered a -0.3% reading in May, indicating deflationary pressures. Germany's retail sales decreased by 0.3% in April, a better-than-expected result. Spain's unemployment fell by 36,300 in May, reaching the lowest May level in nearly two decades. The UK saw mortgage approvals increase to 65.9K in April, though money supply growth slowed. The average UK mortgage rate remained steady at 6.6% in May. Hong Kong's retail sales increased by 8.6% in April, a slowdown from the previous period. France successfully sold €13.998 billion in long-term government bonds.