November inflation, consumer spending data are highlights for markets this week

The highlights for markets and economists this coming week will be the U.S. November inflation readings and the latest check-up on the health of consumer spending ahead of the holiday period.

And Federal Reserve Chairman Jerome Powell will have everyone’s attention on Wednesday afternoon.

November consumer inflation

Tuesday, 8:30 a.m. Eastern

Economists expect soft headline inflation but a firm core reading, according to economists surveyed by the Wall Street Journal. Headline inflation will be unchanged for the second straight month, while core inflation will tick up to 0.3% from 0.2% in October. Energy prices will lead to the soft headline while the acceleration in core inflation reflects swings in volatile components such as used car prices and hotels. said Michael Gapen, U.S. economist at Bank of America. Over the past year, inflation is expected to rise a still sticky 4% in November, with the core up 3%.

November wholesale inflation

Wednesday, 8:30 a.m. Eastern

Further down the inflation pipeline, economists think U.S. producer prices rose 0.1% in November after falling 0.5% in the prior month. “Overall, the report should continue to point to easing input costs pressures that should help limit upside risks to consumer goods price inflation,” Gapen said, in a note to clients.

Fed policy decision, Powell presser

Wednesday, 2:00 p.m. Eastern

The Federal Reserve is expected to hold its benchmark interest rate steady in a range of 5.25% to 5.5%, where they have been since July. The Fed will be shifting from questions about how high to take interest rates to how long to hold them at high levels. The central bank is reluctant to signal that it is preparing to ease monetary policy, as this could add fuel to market expectations of quick rate cuts in 2024, economists said.

November retail sales

Thursday, 8:30 a.m. Eastern

Economists polled by the Wall Street Journal expect retail sales dipped 0.1% in November for the second straight month.

This would be the first back-to-back drop in retail sales since the first quarter.

Auto sales were weak in November. Excluding autos, retail sales are forecast to rise a modest 0.1%.

“U.S. consumers have been resolute in their spending, but a combination of powerful headwinds, including elevated interest rates, high prices and slowing job growth, are beginning to bite,” said Scott Anderson, chief U.S. economist at BMO Capital Markets.

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