Treasury
U.S. retail sales rose 0.5% month-over-month in April, a notable slowdown from March's 1.6%, with a year-over-year increase of 4.9%. High inflation has caused real wage growth to lag behind prices, dampening consumer confidence, and retail sales may face further pressure in the coming months.
Data from the U.S. Bureau of Labor Statistics shows that the Producer Price Index rose 1.4% month-over-month and 6% year-over-year in April, the largest annual increase since December 2022. The Iran war pushed up oil prices, with transportation and warehousing costs rising 5% and wholesale energy prices surging 7.8%. Boston Fed President Collins warned that supply disruptions may persist, and inflationary pressures may require policy responses.
Data from the U.S. Bureau of Labor Statistics shows that the March consumer price index rose 3.8% year-on-year, hitting a three-year high, with energy prices surging 17.9% as the main driver, outpacing average hourly wage growth. Core CPI rose 2.8%, and food prices rose 3.2% year-on-year. Market expectations for Fed rate cuts within the year have significantly cooled, with some economists suggesting the possibility of rate hikes.
A survey released Monday by the National Association for Business Economics (NABE) shows that inflation triggered by the Iran war is raising corporate costs, squeezing profits, and prompting companies to scale back investment and hiring plans. The survey found that 48% of respondent firms reported business damage, 44% reported higher input costs, and 24% planned to lower investment and hiring expectations. Additionally, economists' concerns about recession risks have increased, though most believe that rising energy prices will not exert sustained pressure on core inflation.
U.S. April nonfarm payrolls added 115,000, exceeding expectations, with the unemployment rate holding at 4.3%. Despite high tariffs and soaring oil prices caused by the Iran war, the job market remains resilient. Chicago Fed President Goolsbee said the job market shows no signs of collapse, but inflationary pressures still require vigilance.
Data released by the U.S. Bureau of Labor Statistics on Tuesday showed that hiring activity accelerated noticeably in March, and job vacancies remained stable, alleviating concerns from previous months about a weakening labor market. However, layoffs increased slightly, and the quits rate rose marginally. Fed Chair Powell stated that the policy stance is in a 'very good position' to wait for more data.
Data from the US Bureau of Economic Analysis shows that in the first quarter of 2026, US GDP grew at an annualized rate of 2%, with corporate investment in equipment and structures surging 10.4%, the largest increase since the second quarter of 2023. AI investment has become a major driver, but economists warn that the Iran war could weigh on the economic outlook.
The Federal Reserve held its main interest rate steady at Wednesday's meeting, but with four dissenting votes. Policymakers noted that the Iran war, now in its third month, poses risks to inflation and employment. Chair Powell said the economy is "solid" but acknowledged uncertainty stemming from the Middle East conflict. Three dissenters did not support adding an easing bias to the statement, while Governor Stephen Miran advocated for a 25-basis-point rate cut.
Data released by The Conference Board on Tuesday showed that the U.S. consumer confidence index unexpectedly rose to 92.8 in April, up 0.6 percentage points from March, mainly due to improved consumer assessments of the current job market and its outlook. Although assessments of business conditions declined, positive signals from the labor market offset this impact. Meanwhile, the war in Iran pushed up oil prices, intensifying consumer concerns about inflation, and the University of Michigan consumer sentiment index hit a historic low. Federal Reserve officials are increasingly divided on interest rate decisions, with the market widely expecting rates to remain unchanged this week.
The University of Michigan's April consumer confidence index fell to 49.8, the lowest since data collection began in 1978. The Iran war triggered a sharp rise in gasoline prices, with one-year inflation expectations climbing to 4.7%. Economists warn that if the Strait of Hormuz remains disrupted, consumer confidence is unlikely to improve.