Economic week ahead: trade, ECB, inflation

Economists expect data due this week to show US inflation has continued to climb after hitting a four-decade high in January.


Photo:

Richard B. Levine/Zuma Press

US inflation data highlights this week’s record of regularly scheduled economic releases. Official reports will not yet fully capture the growing economic fallout from Russia’s invasion of Ukraine, which has driven up prices for energy and other commodities, and threatened a wider supply shock.

Tuesday

The US trade deficit hit a record high last year, underscoring both strong domestic demand and dependence on foreign suppliers. This trend could continue into 2022. Economists forecast another record monthly trade gap in January, as U.S. consumers continued to spend, businesses worked to replenish inventories and inflation pushed prices higher. new heights.

Wednesday

Inflation in China probably fell further in February. The producer price index is expected to rise 8.8% from a year earlier in February, slowing from January’s 9.1% gain, according to economists polled by The Wall Street Journal. Annual consumer price inflation is expected to remain stable, with weak food prices offsetting higher prices for other commodities.

Thursday

The European Central Bank is likely to lower its economic growth forecast and raise its inflation outlook after Russia’s invasion of Ukraine sent commodity prices soaring, it said. hampered supply chains and increased the risk of wider economic and geopolitical fallout. The ECB, at its policy meeting, faces a dilemma as it seeks to balance the competing risks of overheated consumer prices – inflation is already at an all-time high – and stagnant economic activity .

U.S. inflation hit a four-decade high in January as strong consumer demand came up against pandemic-related supply disruptions. Price pressure is unlikely to ease in February. Economists expect the consumer price index to rise further last month as demand remained strong and the costs of energy and other raw materials rose further. Thursday’s report will be one of the last major data releases ahead of the Federal Reserve’s March 15-16 policy meeting, where officials are expected to raise interest rates in a bid to rein in inflation.

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