This week’s economic data is likely to underscore both the highest inflation since the 1980s and a historically tight labor market.
Economists are watching China’s official surveys of purchasing managers in manufacturing and services to determine whether a resurgence of Covid-19 will affect production and further hamper logistics. With global supply chains already strained, a production setback or shipping delays could add to already high inflationary pressures outside the country.
US consumers are still spending, although household spending appears to be growing at a slower pace than at the start of the year as rising prices and Russia’s invasion of Ukraine weigh on confidence. Economists polled by the Wall Street Journal are forecasting that consumer spending on goods and services rose for the second straight month in February, partly due to higher prices.
The Federal Reserve’s preferred measure of inflation is expected to hit a new multi-decade high in February, underscoring challenges for the central bank as it tries to stem rising prices without triggering a recession. The Commerce Department’s price index for personal consumption spending excluding food and energy was pushed higher as strong consumer demand meets pandemic-related supply shortages.
U.S. employers have been adding jobs at a rock-steady pace in recent months as the job market moves toward a post-pandemic world. Economists are forecasting another strong month of job gains in March but will be watching closely to see whether a tight labor market – characterized by more vacancies than available labor – pushes up wages and fuels inflation.
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Appeared in the print edition of March 28, 2022 as “Wirtschaftskalender”.
https://www.wsj.com/articles/economy-week-ahead-key-inflation-jobs-numbers-highlight-weeks-data-11648407603?mod=pls_whats_news_us_business_f Economy Week Ahead: Key inflation, jobs numbers highlight week’s data