In April and May, there was a relative deterioration in the main OECD economies, with some divergences in the magnitude and extent of this deterioration across the economies. In Europe, the deterioration observed in the manufacturing sector over the past few months is beginning to spread to services, where confidence indices have begun a downward trend. In the United States, the ISM non-manufacturing rose moderately in April, compared to an ISM manufacturing index below 50 for the sixth consecutive month.
This deterioration in the business climate has remained gradual and has not, for the time being, interrupted the momentum of the labour market. The nowcasts for Q2 highlight some divergence, with lower figures in the eurozone (-0.1% q/q), including in France (0%), than in the United States (Atlanta Fed GDPNow estimate at 0.7%), while our forecasts are more homogeneous between these economic areas (+0.2% for Q2 in the eurozone and in the United States). This suggests a downward risk in eurozone countries and an upward risk in the US and UK.
Across the board, disinflation remains partial and the household confidence has improved only moderately. Core inflation remains close to its peak levels in many countries, and while it is well below these levels in the US, it has not really fallen since the beginning of the year.
