(Bloomberg) — Business activity in the euro area contracted for the first time since 2024 on a pronounced weakening in the services sector as war in the Middle East suppressed demand.
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In the US, retail sales powered ahead last month in a broad advance that underscored a resilient consumer. Meanwhile, South Korea’s economy expanded by the most since 2020 as rampant investment in artificial intelligence continues to fuel a technology-led export boom.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:
Europe
Business activity in the euro area unexpectedly shrank for the first time since late 2024 due to a steep drop in the services sector as the Iran war weighs on consumers. The trend was similar in Germany, where industry held up while services plummeted. In France, manufacturing actually surpassed expectations with its strongest performance since 2022 even as services sank. Price pressures continued to build across the region.
UK inflation accelerated in March, as a surge in energy costs triggered by the Iran war started to hit consumers in the pocket. The consumer prices index rose 3.3% from a year earlier, up from 3% the previous month. The price of motor fuel jumped by the most since 2022 when Russia invaded Ukraine, while services inflation also quickened.
Shell Plc said Europe’s oil refineries are working flat-out to make jet fuel as airlines warn of a supply crunch, with the aviation industry fast becoming a primary pinch point because of the Iran war. “Very clearly every refinery in Europe is on what we call max jet mode,” Frans Everts, head of the company’s Dutch business, told journalists on Wednesday.
US
Retail sales soared in March by the most in a year, suggesting consumers continued to spend on a wide array of merchandise despite a surge in gasoline prices sparked by the Iran war. While the March increase was led by a record jump in spending on gas, nearly every category in the report — from furniture to electronics to general merchandise — posted increases.
Economists raised their estimates for US inflation and said they expect only one Federal Reserve interest-rate cut this year amid elevated energy costs sparked by the Iran war. The personal consumption expenditures price index is now seen rising 3.6% in the second quarter from a year earlier, according to Bloomberg’s April survey of economists. That compares with the 3.3% estimate in the March survey.
