Economy in Brief

Financial markets have been on a geopolitical rollercoaster in recent days. The Iran–Israel flare-up briefly sent oil prices surging and risk assets tumbling, but tensions have since eased and market conditions have stabilised. That calm has refocused attention on underlying fundamentals—and the signals are mixed. Business surveys and Asian trade data (charts 1 and 2) suggest global growth momentum has held up well, despite the recent US tariff shock. But consumers are painting a more cautious picture: confidence remains subdued across the US, UK, and Eurozone, pointing to a more fragile backdrop (chart 3). In the US, signs of softer growth and inflation have caught the Fed’s eye, with several officials adopting a more dovish tone in recent days (chart 4). Yet structural risks continue to loom large. The sustained strength in gold and bitcoin reflects ongoing unease over inflation, financial stability, and broader geopolitical risk (chart 5). And the energy transition remains a critical faultline. Fossil fuels still dominate electricity generation, and while renewables are growing, they are arguably not scaling fast enough to meet rising demand or climate goals (chart 6). In short, climate risk and geopolitical instability continue to cast a long shadow over the outlook—well beyond the reach of monetary policy.

• The previously reported 0.2% q/q saar decline was revised to -0.5%.
• Consumer spending weakened markedly to a tepid 0.5% from 1.2% previously.
• Net exports were still the major drag while inventory investment still made a key contribution.
• GDP and PCE inflation were each revised up slightly.

• Rise recaptures part of earlier decline.
• Regional gains are widespread.

• Fueled by robust orders for aircraft, but also respectable elsewhere.
• Demand for capital goods holding up well.

• Deficit rise follows substantial narrowing.
• Sharp export decline reverses earlier increase.
• Imports are little changed following huge decline.

• CFNAI -0.28 in May; -0.36 in April.
• Two of four CFNAI components up m/m, but three make negative contributions.
• Personal Consumption & Housing index falls to -0.12, a four-month low.
• CFNAI-MA3 drops to -0.16, the first negative figure since Jan.; still above -0.70 (recession signal).

• Initial claims for unemployment insurance declined by 10,000 in the week ended June 21.
• Total beneficiaries rose by 37,000 in the June 14 week.
• The insured unemployment rate was unchanged at 1.3%.

• Sales fall to lowest level since October.
• Declines spread throughout most of country.
• Median sales price strengthens to highest since January.