On Wednesday, Australia will release the wage price index q/q and on Thursday the employment change and the unemployment rate. Also on Thursday, in the U.K. we'll get the GDP m/m and the preliminary GDP q/q figures and in the U.S., the PPI m/m, retail sales m/m and unemployment claims. Fed Chair Powell will speak at the Second Thomas Laubach Research Conference in Washington, D.C.
In the U.S., the consensus for the core CPI m/m is 0.3% vs. the prior 0.1%; for the CPI m/m, it is 0.3% vs. the prior -0.1%; and the CPI y/y is expected to remain unchanged at 2.4%.
While similar headwinds persisted into April, seasonal patterns and the early effects of tariffs, particularly on auto prices, may begin to push core goods inflation higher, according to analysts from Wells Fargo. However, the full impact of the tariff policies will not yet be visible in inflation this month.
Overall, annual wage inflation declined from 3.6% to 3.2% in the previous quarter. This week’s data is not expected to show improvement, and the outlook remains subdued; however, the annual rate is expected to hold steady at 3.2%.
In March, employment rose by 32.2K, but was flat in Q1 2025 overall. According to Westpac analysts, the uneven monthly prints likely reflect softer population growth, which has also contributed to a decline in labour force participation from recent highs. Given the ongoing moderation in population growth, a modest employment increase in April is likely to keep the employment-to-population ratio steady.
The expectation for participation to remain at 66.8%, along with an unchanged unemployment rate at 4.1%, reflects the resilience of the labour market amid softer population and employment growth, according to Westpac.
In the U.S., the consensus for core retail sales m/m is 0.3% vs. the prior 0.5%, while retail sales m/m are expected to be flat at 0.0% vs. the prior 1.4%.
Looking ahead, the sustainability of consumer spending will depend on whether March’s strength was primarily due to front-loaded demand. If purchases for big-ticket items like vehicles were pulled forward, it could lead to softer spending in the coming months as households scale back.
However, early reports indicate that auto sales remained robust in April, likely delaying any major slowdown. As a result, retail sales for April are expected to post a modest overall gain, with non-auto categories rising a steady 0.3%.
This article was written by Gina Constantin at www.forexlive.com. Read More Details
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