Economy Week Ahead: Fed Interest Rate Decision, U.S. CPI and Retail Sales

Date : 12/08/2019 @ 8:29PM
Source : Dow Jones News

Economy Week Ahead: Fed Interest Rate Decision, U.S. CPI and Retail Sales

By WSJ Staff 

In the week ahead, central bankers in the U.S. and Europe issue policy decisions. U.S. data will offer measures of consumer strength and prices.


Federal Reserve officials begin a two-day meeting, where they will likely decide to hold interest rates steady. The Fed lowered its short-term benchmark rate by a quarter percentage point at its previous three meetings to provide a cushion for the U.S. economy amid a broader global slowdown. After Friday's better-than-expected jobs report and recent data that have indicated inflation remains muted, the Fed should feel comfortable keeping rates where they are. Fed watchers will be listening closely for signals to the contrary when chairman Jerome Powell holds a press conference at the meeting's conclusion.

Elsewhere on Tuesday, China releases data on inflation, which has been complicating its central bank's policy easing efforts. The country's consumer price-index likely grew 4.4% in November from a year earlier, accelerating from a 3.8% gain in October, according to a median forecast by economists polled by The Wall Street Journal. That would be the fastest pace in nearly eight years. Continued producer-price deflation, however, means that policy makers still need to support businesses with some easing measures. The producer-price index likely dropped by 1.5%, slipping for five months in a row, according to the same poll.


The U.S. will get its own inflation data when the Labor Department issues the consumer-price index, which measures changes in how much Americans are paying for everyday items ranging from food to dental care. Economists surveyed by The Wall Street Journal forecast the index rose 0.2% in November from the previous month and 2.0% from November 2018. In October, the index rose 0.4% over the previous month and 1.8% from the prior year.

The following day will offer another inflation reading with the release of the producer-price index, a measure of the prices businesses receive for their goods and services.


The European Central Bank is expected to leave policy unchanged after the first meeting of its governing council under the new presidency of Christine Lagarde. What will likely be of greater interest are the signals Ms. Lagarde sends about policy in 2020 during her first news conference. With some signs of stabilization in the eurozone economy after a slowdown, Ms. Lagarde isn't expected to flag a further cut in the already-negative policy interest rate or an increase in bond purchases, and may instead give more weight to the need to monitor the negative side effects of those policies.


The Commerce Department releases figures on November retail sales. Consumer spending has helped bolster the U.S. economy this year, and Friday's report will offer insight into whether that trend continued last month, as the unemployment rate fell back to a 50-year low and wages ticked higher. Economists expect retail sales rose 0.5% in November from October.


(END) Dow Jones Newswires

December 08, 2019 15:14 ET (20:14 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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