Focus Shifts to U.S. Prices After Jobs Disappointment: Eco Week
A broker speaks on a fixed line telephone as he monitors financial data on computer screens on the trading floor. (Photographer: Jason Alden/Bloomberg)

Focus Shifts to U.S. Prices After Jobs Disappointment: Eco Week

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Inflation and retail sales reports receive top billing on the U.S. economic calendar this coming week in the wake of surprisingly disappointing jobs figures.

The consumer-price index excluding volatile food and energy components is projected to increase a healthy 0.3% in April, matching the previous month’s advance and signaling moderate inflation. While the CPI will accelerate sharply from a year earlier, when the pandemic depressed activity, Federal Reserve policy makers are taking the increases in stride.

Focus Shifts to U.S. Prices After Jobs Disappointment: Eco Week

The figures will help show the extent that surging commodities and materials prices are being passed through to households. The Labor Department’s report on Wednesday precede figures on retail demand at week’s end.

Economists project the value of purchases at U.S. retailers climbed another 1% last month after a March surge that was the largest in 10 months and fueled by a fresh round of government stimulus checks.

What Bloomberg Economics Says:

“Concerns about inflationary pressures pushing the Fed’s hand sooner than anticipated should abate in light of the latest labor market data indicating significantly less progress toward pre-pandemic trends. A sharp acceleration in core inflation above 2% in the highly-watched CPI report for April will be discounted as a result of the much-touted base effects and a transient mix of demand-pull and cost-push factors.”

--Yelena Shulyatyeva, Andrew Husby and Eliza Winger. For full preview, click here

Industrial production, the number of job openings and prices paid to producers round out a flurry of U.S. economic data.

Elsewhere, China also will release inflation data, while Australia’s federal budget will be revealed, the U.K. publishes a gross domestic product report, and central banks in Mexico, Chile, Peru, Romania and Serbia hold interest-rate decisions.

Focus Shifts to U.S. Prices After Jobs Disappointment: Eco Week

Click here for what happened last week and below is our wrap of what is coming up in the global economy.

U.S. and Canada

U.S. economic data will be closely watched by the dozen Fed officials set to make public appearances throughout the week. Scheduled speakers include Chicago Fed President Charles Evans, New York Fed President John Williams, San Francisco Fed President Mary Daly and Fed Vice Chair Richard Clarida.

In Canada, central bank chief Tiff Macklem will give first speech since last month’s decision to pare back its quantitative-easing program.

  • For more, read Bloomberg Economics’ full Week Ahead for the U.S.

Asia

Australia on Tuesday will announce its federal budget for the year starting July 1, with a rapidly recovering jobs market and booming iron-ore price set to narrow its previously announced deficit and provide Prime Minister Scott Morrison with more room to support the recovery with targeted programs. That budget will include more spending to improving women’s economic and health outcomes, Australian Treasurer Josh Frydenberg said.

That’s the same day China releases consumer and factory inflation data that’s set to show producer prices are accelerating, adding to global inflation pressures. Census results also will finally be released this week, after a delay in the report sparked concern China’s population may have shrunk for the first time in modern records.

With an ongoing state of emergency in Tokyo and some other big cities now having been extended until the end of May, Japan’s household spending figures for March will show how much impact the final days of a previous emergency had on family purse strings ahead of first-quarter GDP figures later this month.

Focus Shifts to U.S. Prices After Jobs Disappointment: Eco Week

A summary of the Bank of Japan’s most recent meeting could shed more light on the thinking behind its latest economic forecasts showing a lack of inflation spark.

South Korean jobless figures out Wednesday will indicate the strength of the recovery in the labor market there.

  • For more, read Bloomberg Economics’ full Week Ahead for Asia

Europe, Middle East, Africa

Britain’s economic turnaround in the coronavirus crisis probably began in the first quarter, a shift that GDP data on Wednesday is likely to confirm.

While output almost certainly shrank over the whole period, the monthly outcome for March may show a sharp increase, marking an initial snapback in growth as vaccinations allowed the U.K. to plot a path out of the pandemic. The Bank of England now reckons the economy will reach its pre-crisis level before the end of the year, one quarter earlier than thought.

Focus Shifts to U.S. Prices After Jobs Disappointment: Eco Week

The euro-zone’s recovery is less advanced than the U.K.’s after an abortive start to vaccine rollouts, but building momentum in inoculations means expansion has probably resumed there too. Whether such progress is enough to improve the outlook for the year as a whole is a question the European Commission will attempt to answer when it releases new growth forecasts on Wednesday.

Elsewhere in Europe, the Romanian and Serbian central banks are both expected to keep rates unchanged. Meanwhile Hungarian inflation data will probably show a surge above the central bank’s upper tolerance band, testing the resolve of policy makers to keep borrowing costs on hold.

Turkey is expected to report that its current-account deficit widened in March to $3.8 billion. Investors are watching that data closely amid concerns about the level of the nation’s foreign-exchange reserves.

Ghanaian data will probably show inflation at the lowest level in more than a year, in line with central bank forecasts of a return to the center of the target band of 6% to 10% during the current quarter.

  • For more, read Bloomberg Economics’ full Week Ahead for EMEA

Latin America

On Tuesday, the April reading of Brazil’s benchmark inflation index may well see the year-on-year figure push past 7%, well outside the 2.25% to 5.25% target range.

Mexico’s March industrial production report out Wednesday has some analysts looking for the first year-on-year expansion since early 2019.

On Thursday, April inflation data for Argentina and greater Buenos Aires may look much like those for March, when the monthly readings were 4.8% and 5.2% respectively.

Focus Shifts to U.S. Prices After Jobs Disappointment: Eco Week

Then, in the space of five hours Thursday, the central banks of Mexico, Chile and Peru announce rate decisions, but outside of some potentially hawkish language from Banxico, look for all three to keep their key rates at or near record lows.

On Friday, Colombia publishes first-quarter output data. In recent months, the central bank and a host of analysts had marked up their 2021 growth forecasts, but a new deadly phase of the pandemic and violent street protests over proposed tax hikes that forced out the finance minister may have clouded the outlook.

Focus Shifts to U.S. Prices After Jobs Disappointment: Eco Week
  • For more, read Bloomberg Economics’ full Week Ahead for Latin America

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