By Vince Golle and Craig Stirling
Prices for US goods and services probably rose at a slower pace in October after two particularly uncomfortable months for American consumers.
The consumer price index is seen rising 0.3% after a 0.6% increase that was the largest since April, based on the median projection in a Bloomberg survey of economists ahead of Tuesday’s Bureau of Labor Statistics’ release.
The October CPI will be the last before the Federal Reserve’s meeting in December, at which investors expect policymakers to boost interest rates. Economists will also assess the finer details of the report for clues on inflation risks into early 2027.
Economists at Citigroup Inc. said in a recent note that they anticipate limited pass-through of high energy costs to goods prices, as well as moderate services inflation.
What Bloomberg Economics Says…
The latest snapshot of inflation also follows Friday’s stronger-than-expected October jobs report. Sustained employment growth has the potential of ensuring consumers keep spending, while allowing the Fed to keep its focus squarely on inflation.
Another price report, due on Friday, is projected to show nagging inflationary pressures faced by companies. The producer price index is forecast to accelerate to 6.6% for the year through October, the steepest annual increase in nearly four years.
Aside from inflation reports, National Association of Realtors figures on Thursday are expected to show a decline in contract closings on previously owned homes to the lowest level since 2010 as mortgage rates stay elevated.
For more, read Bloomberg Economics’ full Week Ahead for the US
In Canada, September manufacturing and wholesale reports are expected to reflect a slowdown in third-quarter economic growth. Manufacturing sales likely rose just 0.1% that month, against 1.5% the month earlier.
That may be partly due to an unexpected work stoppage at US auto plants that dampened cross-border auto trade.
Wholesale sales, excluding petroleum, likely increased slightly, by 0.5%, against a 1.6% decline the month before. Meanwhile, the Bank of Canada will release a summary of the deliberations that led to its first rate hike in three years.
Elsewhere, inflation data from China to Norway, central-bank minutes from Japan to Sweden, and growth data in the UK are among highlights.
Asia
The week kicked off with Australian housing data on Sunday, revealing that home sales and auction clearance rates climbed and offering hopes of a recovery for a property market that has slumped as interest rates rose this year.
Japan also releases producer prices for October that will likely show cost pressures remain elevated, while consumer-price data from India may show inflation above 6% for the first time since August 2023.
Third-quarter data from the Philippines are forecast to reveal economic growth accelerated a bit. Australia releases gauges for consumer and business sentiment on Wednesday, with the NAB Business Confidence reading for October likely to be negative for a ninth consecutive month.
September household spending data in Japan on Tuesday may show outlays fell for a 10th straight month, casting doubt over the Bank of Japan’s assertion that a virtuous cycle of rising incomes feeding into spending will gradually intensify. Trade data are due from China, India and Taiwan.
Asia has no central bank decisions in the coming week, but the BOJ will release a summary of opinions from its October board meeting. It held settings steady, while declaring that underlying inflation had finally reached its 2% inflation target. That assessment opens the door to another rate hike as soon as December.
Europe, Middle East, Africa
Policymaker appearances will also draw attention. BOE Governor Andrew Bailey is in Zurich on Monday, and Deputy Governor Clare Lombardelli speaks at the “Bank of England and Its Watchers” conference the following day. European Central Bank chief economist Philip Lane also speaks at that event.
Meanwhile, following the close of nominations for ECB president, euro-zone finance ministers will discuss the race to succeed Christine Lagarde at a meeting in Brussels on Monday.
Data in the region include German exports on Monday, Italian industrial production on Wednesday, and a second reading of euro-area GDP on Friday.
Egyptian officials will also closely watch their inflation reading on Tuesday after price growth eased for two straight months. The central bank unexpectedly raised rates in October.
Ghana’s finance minister, Cassiel Ato Forson, in his 2027 budget to lawmakers on Thursday, is expected to outline details of a $10 billion economic plan aimed at accelerating growth and creating jobs after years of post-default fiscal consolidation.
Russia’s economy is likely to show weak expansion when third-quarter data are published on Friday, according to Bloomberg Economics. Inflation numbers for October, also due on Friday, may show annual price growth accelerated to above 7% for the first time in a year.
Latin America
Colombia’s consumer-price report also comes on the heels of a rate-setting meeting, though in BanRep’s case the board opted to keep policy unchanged and at a much more restrictive 12.25%.
Center stage on Tuesday belongs to Banco Central do Brasil, with Brazil-watchers hoping to glean some measure of guidance from the minutes of its Nov. 3-4 meeting.
But President Luiz Inácio Lula da Silva’s shock reelection and silence on how he plans to get the government’s finances back in order have sidelined the central bank for the time being. Prior to the bank’s Nov. 4 hold, local analysts had marked up their key rate forecasts to the 2029 forecast horizon.
In a timely follow-up, Brazil’s October inflation figures are likely to show another move higher from September’s above-target 4.58% print, consistent with analysts’ most recent 2026 estimate of 5.22%.
Less than a year from the next election, Argentina’s economy has skidded into a technical recession and keeping the lid on consumer prices may be a challenge for President Javier Milei.
Peru’s central bank meets Thursday, and after 13 straight months of keeping the key rate at 4.25%, Governor Julio Velarde and colleagues are likely to deliver their first hike since January 2023 after October inflation jumped to 5.25%.
