The Economy Forecast: Investor Are Analyzing Data About Inflation From Retail Sales to Industrial Output.

Measures of U.S. inflation and consumer spending are in focus this week.

Tuesday

Inflation likely stayed elevated in the U.S. in August while the coronavirus pandemic intensified mismatches between what consumers demand and what the market is able to supply. Economists are forecasting another strong gain for the consumer-price index last month, though there are some signs that underlying price pressures are leveling off.

Wednesday

China’s economic activity likely slowed further in August after lockdowns to control Covid-19 outbreaks in multiple provinces hindered growth. Economists surveyed by The Wall Street Journal expect year-over-year retail sales growth to edge down to 6.3% from 8.5% in July. Industrial output is forecast to grow 5.6% from a year earlier, decelerating from 6.4% in July. And China’s nonrural fixed-asset investment, a measure that captures investment in factories, railroads and new homes, also likely retreated to 8.8% growth in the first eight months of
the year, slowing down from the 10.5% rise in the January to July period.

U.S. industrial production—a measure of output at factories, utilities and mines—is expected to increase in August, driven by manufacturing gains. Supply chain trouble across the auto industry and Hurricane Ida’s impact on the energy sector are two wild cards that could negatively affect last month’s numbers.

Thursday
U.S. retail sales are expected to fall for the third straight month in August. Supply chain issues are hindering auto production and crimping sales, while a resurgent Covid-19 is denting consumer confidence and possibly purchases at stores, at restaurants and online.

Filings for jobless benefits reached a pandemic low at the start of September, evidence that employers are holding on to workers despite uncertainty and economic fallout from the Delta variant of Covid-19. Claims have trended lower since mid-July, though some economists are forecasting a small uptick for the week ended Sept. 11.