Economy Week Ahead: Housing, Inflation and the Fed
Also on tap, August surveys of purchasing managers in some of the world’s largest economies
Federal Reserve Chairman Jerome Powell’s remarks at the central bank’s Jackson Hole economic symposium on Friday cap off a full week of economic data.
Monday
August surveys of purchasing managers in some of the world’s largest economies—including the U.S.—will offer the freshest indication of how the rapid spread of the Delta variant of Covid-19 is affecting economic activity. Economists expect to see a modest slowdown in the expansion of the services sector in both the U.S. and Europe and declines in activity in both Japan and Australia.
U.S. home prices hit a record in June amid a housing boom that is pitting low mortgage rates and strong demand against limited supplies of homes for sale. Economists are forecasting a small drop in existing-home sales in July, to an annual pace of 5.83 million from 5.86 million a month earlier, as price and supply constraints lock more would-be buyers out of the market.
Thursday
U.S. jobless claims fell to a new pandemic low in the second week of August, a sign the labor market continues to improve despite rising Covid-19 cases and hospitalizations. Economists are forecasting little change in applications for unemployment benefits during the week ended Aug. 21, an outcome that would suggest layoffs are holding fairly steady as the summer unfolds.
Friday
The Commerce Department releases key measures of consumer spending and inflation for July. Data on household outlays could show the continuing shift toward spending on in-person services and away from goods amid the latest Covid-19 disruptions. The Fed’s preferred inflation gauge, the personal-consumption expenditures price index, will be closely watched to see if price pressures are easing as the economy adjusts to a misalignment of supply and demand caused by the pandemic.
Mr. Powell speaks on the economic outlook at the central bank’s Jackson Hole economic symposium. Fed officials appear on track to begin reversing their easy-money policies later this year, though there are several wild cards that could alter the timing of their plans. Those include higher-than-expected inflation and rapidly rising Covid-19 cases associated with the spread of the Delta variant.