In April, annual inflation in the US continued to accelerate to 3.8%, compared with 3.3% in March, driven mainly by rising energy prices, particularly for fuel. Food prices and housing rents also grew more rapidly in April. Meanwhile, the euro area economy posted growth of 0.1% quarter on quarter in the first quarter, held back by the fall in Ireland's GDP and stagnation in France. Although euro area industrial output rose for the second month in a row in March, increasing by 0.4% month on month, German manufacturing output fell for the fourth consecutive month.

In April, annual inflation in the US continued to accelerate, climbing to 3.8% from 3.3% in March. Month on month, US consumer prices rose by 0.6%. Energy prices continued to rise in April, adding roughly 1.1 percentage points to annual inflation. Food prices and housing rents, which make up a substantial share of the consumption basket, also grew more rapidly. Prices in the categories that are independent of energy and food price swings rose by 2.8% year on year (previously 2.6%), reaching their highest level since September last year. In the first half of May, fuel prices in the US continued to climb, suggesting that inflation could remain high in the near term. Analysts continued to raise their US inflation forecasts, expecting average annual inflation to reach 3.3% this year before easing to around 2.4% next year — the level that prevailed before the start of the conflict between Iran and the US. Since the end of April, market participants have removed rate cuts over the next two years from their forecasts, and have recently begun to price in rate increases in the first half of 2027.

Despite the rise in energy prices, US consumer spending continued to grow. In April, retail turnover in nominal terms (excluding cars and fuel) increased by 0.5% month on month, marking the fourth relatively rapid rise in a row. Apart from spending on furniture and clothing, demand for other goods increased, and spending in cafés also grew. Overall, US retail turnover in April was 4.9% above the level of a year earlier. Although US household inflation expectations have risen since February, consumer sentiment did not react significantly to the rise in oil prices and has remained relatively stable over the past six months. Even so, consumer sentiment has remained weak overall since Donald Trump's inauguration. Moreover, rising inflation is eroding household purchasing power — in April it already exceeded the annual growth in average hourly earnings (3.6%).

In March, euro area industrial output rose for the second month in a row, increasing by 0.4% month on month. Year on year, output in euro area industry was 2.4% lower than a year earlier. Although most euro area countries recorded positive monthly dynamics in March, German manufacturing output fell for the fourth consecutive month — by 0.8% compared with February and by 3.6% year on year. Overall, German industrial output shrank by an average of 1.2% quarter on quarter in the first quarter. Retail trade in Germany also showed negative dynamics, recording its third consecutive decline in March (–0.8% month on month) and falling by an average of 0.7% in the first quarter. Given these weak results, Germany's GDP growth of 0.3% quarter on quarter looks rather surprising. Overall, the euro area economy posted growth of just 0.1% in the first quarter, held back by the fall in Ireland's GDP and stagnation in France.