Last week’s economic reports painted an inflationary picture, which will affect the Fed’s interest rate decision going forward. While analysts expect the Fed to pause rate hikes in its coming meeting in September, the data supports its “higher-for-longer stance” and suggests that the inflation fight has not been won yet. That is why this coming week’s economic reports are of a great importance for investors: they will add an indication of the health of the consumer sector to the data-dependent central bank’s data collection, strongly influencing its further moves.
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Here are three economic events that could affect your portfolio this week. For a full listing of all upcoming economic events, check out the TipRanks Economic Calendar.
» August’s Consumer Price Index (CPI) – Wednesday, 9/13 – This report, which measures the changes in the retail prices of goods and services over a specific period, is one of the two key inflation measures (the second one is the Personal Consumption Expenditures, or PCE). Policymakers, businesses, and consumers closely watch the CPI report, as it reflects the price trends in the economy. Higher-than-expected CPI numbers may not only suppress consumers’ spending plans but also impact the business outlook. Of course, the Federal Reserve incorporates the CPI into its calculations which affect the policy rate decisions.
» August’s Retail Sales – Thursday, 9/14 – This report, released by the U.S. Census Bureau, measures the monetary equivalent of purchases made by consumers over a specified period. It helps the economists and policymakers to assess the level of consumer demand, one of the main driving forces behind GDP growth. Thus, Retail Sales is a leading indicator, providing an outlook into the current quarter’s economic growth as well as into the inflationary factors on the side of demand.
» September’s Consumer Sentiment Index (preliminary)– Friday, 9/15 – this report, released by the University of Michigan, reflects the level of confidence the consumers feel towards the economy. This confidence affects consumer spending in the short term. Thus, the Index is used by economists, analysts, and policymakers as a leading indicator, helping to unveil the near-future trends in consumer demand, which directly affects economic growth.
