Week Ahead: Economic Indicators (US)

For the December 9th week, here is a list of the major economic indicators released during the US Session.

Wednesday 11th December
08:30 ET
US CPI for November
The US Consumer Price Index is a key measure of inflation, tracking the change in prices paid by consumers for a basket of goods and services over time.
It is published monthly by the Bureau of Labor Statistics (BLS).
The CPI includes categories such as food, housing, transportation, medical care, and apparel.
There are two main versions:
Headline CPI: Includes all items, including volatile categories like food and energy.
Core CPI: Excludes food and energy to provide a clearer view of underlying inflation trends.
CPI is widely used by policymakers, businesses, and investors to assess inflation, influence monetary policy, and adjust income and benefits like Social Security.
What to Expect
If CPI comes in higher than expected, meaning inflation is higher than anticipated, we would be likely to see strength in the dollar and bond yields, and weakness in stocks, as traders decrease their bets on Fed rate cuts, on the assumption that the Fed may need to keep interest rates higher for longer to make sure that inflation is falling back to target.
If inflation comes in lower than expected, we would expect to see weakness in the dollar and bond yields and strength in stocks, as traders solidify/increase their bets on further Fed rate cuts.

10:30 ET
US EIA Weekly Crude Inventories
The US Weekly EIA Crude Oil Inventories report, released every Wednesday by the Energy Information Administration, details the amount of crude oil held in storage across the United States.
It provides insights into the supply and demand dynamics of the oil market.
What to Expect
An increase in inventories suggests higher supply or lower demand, potentially leading to lower oil prices. Conversely, a decrease indicates lower supply or higher demand, which can drive prices up.

Thursday 12th December
08:30 ET
US PPI for November
The US Producer Price Index measures the average change in prices received by domestic producers for their goods and services over time.
It is published monthly by the Bureau of Labor Statistics (BLS) and serves as an indicator of wholesale inflation.
Key features:
The PPI focuses on prices at the producer level rather than at the consumer level, covering industries like manufacturing, agriculture, and energy.
It includes multiple indexes for different stages of production, such as raw materials, intermediate goods, and finished goods.
The PPI helps predict future consumer inflation trends, as changes in producer prices can often pass through to retail prices. It is closely monitored by economists, investors, and policymakers.
What to Expect
If PPI comes in higher than expected, meaning producer inflation is higher than anticipated which could feed into consumer inflation, we would be likely to see strength in the dollar and bond yields and weakness in stocks as traders decrease their bets on Fed rate cuts, on the assumption that the Fed may need to keep interest rates higher for longer to ensure that inflation is falling back to target.
If inflation comes in lower than expected, we would expect to see weakness in the dollar and bond yields and strength in stocks, as traders solidify/increase their bets on further Fed rate cuts.

US Weekly Initial & Continued Jobless Claims
The US Weekly Initial & Continued Jobless Claims report tracks unemployment insurance claims to gauge the health of the job market. Initial claims measure the number of people filing for unemployment benefits for the first time, indicating new job losses.
Continued claims reflect the number of individuals who remain unemployed and are still receiving benefits after their initial filing.
Together, these metrics provide timely insights into labor market conditions and potential economic shifts.
What to Expect
With employment in focus at the moment, this report has been garnering a lot of market attention.
A higher jobless claims number, indicating higher unemployment, would be likely to cause weakness across the US assets (dollar, stocks, and yields), as it feeds into the narrative of a hard landing/broader economic slowdown for the US economy as we come out of the tightening cycle.
A lower jobless claims number, indicating lower unemployment, would be likely to cause strength across the US assets, as it reassures the markets that the US economy may be able to exit the tightening cycle and enter the easing cycle without a recession/broader economic slowdown.
Keep in mind that there has been some volatility in the US equity markets reaction to this data point, as the markets are fighting between the data’s indicator on the broader economy, as well as the potential future impact the data has on monetary policy.