Inflation, Employment In Focus This Week As Data Expected To Sway Fed Policymakers

Investors are planning for a busy trading week ahead as attention shifts to updated inflation figures and March employment data released this week that is expected to sway Committee members at the Federal Reserve about the likelihood of raising interest rates during the next Fed meeting in mid-April.

The overall U.S. employment picture has been solid in recent months with job gains averaging 228,000 per month over the past 3 months with a solid increase of 242,000 in February.

Inflation has also been moving higher and closer to the Fed’s 2 percent inflation target.

The Fed’s preferred inflation gauge, core index PCE inflation, rose to 1.7 percent YOY in January from an upwardly revised 1.46 percent during the previous month.

January’s 1.7 percent core index inflation rise helped to boost inflation to the highest YOY monthly level since February 2013 and reveals that inflation is gaining traction.

The recent rebound in crude oil prices in recent weeks is expected to help inflation to stabilize further.

New PCE inflation figures for February will be reported on Monday.

Economists from briefing.com forecast an increase of 0.2 percent in February, down from 0.3 percent in the previous month.

On Wednesday private payroll processor ADP will release March’s employment report that is expected to show a job increase of 200,000, according to briefing.com forecast which is lower than 214,000 in the previous month.

On Friday the U.S. Bureau of Labor Statistics will report the March non-farm payroll report that is expected to show a job increase of 200,000 in March, according to a briefing.com forecast which is lower than 242,000 in February.

Some other economic data reported this week includes pending home sales for February reported on Monday, consumer confidence for March that comes into focus on Tuesday, Chicago PMI (March) reported on Thursday, and manufacturing data from the ISM index (March) on Friday alongside the non-farm payroll report, construction spending for February, and auto/truck sales for March.

Full Calendar

Monday- PCE prices- inflation (FEB), Pending Home Sales (FEB)

Tuesday- Consumer Confidence (MARCH), Case-Shiller 20 city index (JAN)

Wednesday- ADP Employment change (MARCH), MBA Mortgage Index, Crude Inventories

Thursday- Continuing and Initial Jobless Claims, Chicago PMI (MARCH), Challenger Job Cuts (MARCH)

Friday- Non-farm payroll report (MARCH), ISM Index (MARCH), Construction Spending (FEB), Michigan Sentiment (MARCH), and Auto/Truck Sales (March).

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