Economy in Brief: April 2026

Against a backdrop of persistent geopolitical tensions, firmer energy prices and a busy week of central bank meetings—including the Fed, ECB, BoE and BoJ—financial markets have remained notably resilient, even as the macro narrative has softened at the margin. The message from this week’s charts is one of growing tension beneath that surface calm. Front-end bond yields have moved higher, signalling a shift toward a more cautious, “higher-for-longer” policy outlook (chart 1). At the same time, real-time recession indicators for the United States suggest risks remain contained for now (chart 2). Consumer confidence data paint a more uneven picture, with sharper declines in the euro area and UK than in the US, highlighting regional vulnerabilities to the current energy shock (chart 3). The ECB’s latest bank lending survey reinforces this, pointing to tighter credit conditions and weaker demand—factors that are likely to weigh further on European growth (chart 4). By contrast, developments in the semiconductor sector underline a different dynamic: an intensifying global boom, with accelerating price pressures reflecting both strong AI-driven demand and emerging supply-side constraints linked indirectly to energy and logistics disruptions (chart 5). Finally, labour market data confirm that the AI surge is not merely a market narrative but a tangible structural shift, with hiring for AI-related roles accelerating across economies (chart 6). Taken together, these signals point to a more complex macro environment—one in which resilient markets coexist with softening growth, more persistent inflation risks and increasingly delicate policy trade-offs.

• Robust business investment led the advance; moderate support from consumers.
• Government spending jumped with the reopening of most federal agencies.
• The trade sector remained volatile, making a sizeable negative contribution in Q1.

• The PCE price index jumped 0.7%, reflecting an 11.6% m/m surge in energy prices.
• The core index was up 0.3%, in line with expectations but still well above the Fed’s target.
• Personal income increased 0.6% m/m, led by a 0.4% m/m rise in compensation.
• Personal consumption jumped 0.9% m/m with a slight upward revision to February.
• However, much of the March gain in nominal consumption also reflected the jump in energy prices.
• Real consumption rose by a more modest 0.2% m/m.

• New claims dropped by 26,000 to 189,000.
• Continuing claims declined by 23,000 to 1.785 million.
• The insured unemployment rate remained at 1.2%.

• Data for both February and March were included in today’s report to catch up from delays due to the federal government shutdown last October.
• Starts fell 3.0% m/m in February but rebounded 10.8% m/m in March.
• The 7.2% q/q increase in Q1 was the largest quarterly gain since the economy reopened after the pandemic shutdown in 2020.
• In contrast, permits jumped 11.0% m/m in February but fell 10.8% m/m in March and were up only 1.0% q/q in Q1.

• March headline orders +0.8% m/m, first increase in four mths.; +0.8% y/y, lowest since Dec. ’24.
• Defense aircraft & parts +16.9% m/m following February’s +0.5%.
• Transportation orders +0.8%, first m/m rise since Nov.; orders ex transp. +0.9%, 11th straight m/m increase.
• Core capital goods shipments +1.2%, sixth m/m gain in seven mths., pointing to a solid contribution to Q1’26 GDP from business equipt. spending.
• Durable goods shipments +0.7%; unfilled orders +0.1%; inventories +0.2%.

• Applications for loans to purchase rose, while applications for loan refinancing declined in the latest week.
• Interest rate on 30-year fixed-rate loans rose 1bps to 6.54%.
• Average loan size edged up.