(Bloomberg) — U.S. inflation likely moved sideways at best in October, highlighting the uneven path to easing price pressures in the home stretch toward the Federal Reserve’s target.
The underlying consumer price index due out on Wednesday, which excludes food and energy, likely rose at the same pace both monthly and annually compared to September readings.
The headline CPI likely rose 0.2% for the fourth month, while the year-on-year measure is expected to have accelerated for the first time since March.
“The October CPI report will likely support the notion that the last leg of inflation’s journey toward the target will be the most difficult,” Wells Fargo & Co. economists Sarah House and Aubrey Woessner wrote in a report. “Excluding the most volatile energy and food components, the correction of pandemic-era price distortions has proven frustratingly slow.”
They added that prices for basic goods likely rose again in October, due in part to increased demand for cars and auto parts after hurricanes Helene and Milton. Storm evacuation orders also forced more people to stay in hotels, continuing what has been a “glacial slowdown” in utility prices.
“We expect both the CPI and PPI to rise, further raising long-term rates and further restricting the economy over the next two months. We expect retail sales in the control group to slow and the unemployment rate to continue rising, reaching 4.5% by the end of the year.”
—Anna Wong, Stuart Paul, Eliza Winger, Estelle Ou, Chris G. Collins, economists. For a full analysis, click here.
Still, “the story is very consistent, with inflation continuing to slide down a bumpy road,” and one or two bad reports won’t change that pattern, Federal Reserve Chair Jerome Powell said Thursday after The central bank will cut interest rates by a quarter point.
The US government will also release wholesale inflation figures next week, which have likely recovered after stagnating in September. Meanwhile, profit growth that continues to outpace inflation likely contributed to another decent rise in retail sales, according to data to be released on Friday.
On Tuesday, Federal Reserve Governor Christopher Waller will speak at a banking conference before the central bank releases its latest opinion survey of top loan officers. Powell is scheduled for an event later in the week, while New York Fed President John Williams and Dallas Fed President Lorie Logan are also on the calendar.
Meanwhile, in Canada, October home sales data will reveal whether the central bank’s rate cuts are starting to shake up the sluggish housing market.
A data-packed week elsewhere includes a range of economic figures from China, wages and growth statistics in the UK and multiple inflation readings, from India to Argentina. New forecasts from the European Union will also be published.
Click here to see what happened last week and below you’ll find a summary of what’s coming up for the global economy.
Asia
A burst of data out of China may show the economy’s performance improved marginally in October, with industrial production, fixed asset investment and retail sales expected to rebound somewhat as the slowdown in investment moderates. real estate.
Still, the data will underscore the need for broad stimulus measures adopted since late September as President Xi Jinping seeks to meet his growth goals.
The big batch of figures from China comes at the end of the week, the same day Japan is expected to report its economic growth slowed to an annualized 0.6% quarter-on-quarter in the three months to September.
India’s inflation is expected to have risen to 5.72% in October, while industrial production is expected to recover in September, according to figures to be released on Tuesday.
Australia will receive consumer and business confidence surveys on Tuesday before releasing a series of labor market statistics later in the week.
The third quarter wage price index will be released on Wednesday and other employment statistics for October will be released a day later. Indonesia reports trade data on Friday.
Among central banks, the Bank of Japan publishes a summary of views from its October meeting, when it held rates steady, and Reserve Bank of Australia Governor Michele Bullock appears on a panel on Thursday, and her Fellow policymaker Brad Jones does the same a day later. .
Europe, Middle East, Africa
The UK will be in focus following Thursday’s Bank of England rate cut, which came with a warning about the inflationary impact of the recent budget. Gov. Andrew Bailey is scheduled to give a speech Thursday.
Tuesday’s wage figures may show a slight slowdown in wage growth, offering limited comfort to policymakers. According to economists, a release on Friday will likely reveal that economic growth has weakened in the third quarter to 0.2% from 0.5% in the previous three months.
Other countries with initial GDP figures for the same period include Poland on Thursday and Switzerland on Friday.
Turning to the euro zone, Tuesday’s German ZEW index will offer a glimpse of investor sentiment at a time when Europe’s largest economy is still struggling to overcome industrial unrest and now also faces the prospect of early elections.
Eurozone industrial production will reveal the state of the manufacturing sector at the end of the third quarter on Wednesday and a second GDP estimate will arrive at the same time. The European Commission in Brussels will publish new economic forecasts for the region at the end of the week.
The European Central Bank will publish a report from its October meeting on Thursday, possibly containing clues about officials’ thinking for its December decision. Vice President Luis de Guindos, who spoke in Madrid the same day, is among several officials whose appearances are scheduled.
In Sweden, minutes of the Riksbank’s decision to step up easing with a half-point rate cut will be published on Wednesday, followed by its financial stability report a day later.
In Russia on Wednesday, data will likely show the economy contracted in the third quarter, for the first time since war-related fiscal stimulus began boosting activity in late 2022. Bloomberg Economics forecasts GDP will have fallen between 0.3% and 0.5% in the three months to September.
Russia is among several countries that publish inflation data. Here’s an overview:
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On Sunday, Egyptian monetary officials will expect annual price growth to slow in October after accelerating for two consecutive months to 26.4% in September. That is likely to have delayed the start of a easing cycle.
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Norway may show a notable slowdown in inflation on Monday, to 2.4%. But as the corona’s weakness worried officials, the central bank left borrowing costs unchanged on Thursday, without signaling imminent plans for any reduction.
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With Russia’s October release due on Wednesday, policymakers will watch whether a 200 basis point rate hike last month will help slow price growth toward their 4% target. In September it was at 8.6%.
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On Friday, Nigeria’s inflation figures are expected to show an acceleration from 32.7% to 33.4% after gasoline costs soared due to reduced subsidies, according to Bloomberg Economics.
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On the same day in Israel, data will likely reveal that price growth remained above 3%, the upper end of the official target. It has been above target for three straight months as conflicts in Gaza and Lebanon cause government defense spending to soar and supply constraints worsen.
Among central banks, Zambia’s monetary authorities are expected to leave their rate unchanged at 13.5% to support the drought-hit economy. That ordeal has led the International Monetary Fund to almost halve its growth projections for 2024, to 1.2%.
Latin America
Argentine President Javier Milei is likely to receive good news with the October consumer price report. Monthly inflation may have slowed to a three-year low of just under 3%, with an annual reading below 200%, down from April’s peak of 289.4%.
Analysts expect an hawkish tone in the minutes of the Brazilian central bank’s Nov. 6 decision to raise to 11.25%. At the same time, forward guidance may be thin given that Brazil’s government had not yet committed to cutting spending and all the inherent wild cards following the US elections.
Economists expect an increase of at least the same magnitude at the BCB meeting in December, and many have raised their terminal rate projections to 13% or higher.
Uruguay’s central bank has kept its key rate at 8.5% since April and is likely to keep it there for the fifth consecutive meeting.
In Peru, labor market figures for Lima and GDP estimates for September are available, both underscoring the economy’s recovery from last year’s recession.
The Bank of Mexico’s arguments for a third consecutive rate cut on November 14 seemed simple enough a month ago, but another bout of faster inflation makes it a slightly more difficult decision.
Still, the combination of slower growth and 21 straight months of slowing core inflation will likely prompt Gov. Victoria Rodríguez and her colleagues to press ahead with the reduction to 10.25%.
–With help from Brian Fowler, Laura Dhillon Kane, Monique Vanek, Robert Jameson, Paul Wallace and Piotr Skolimowski.
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