The Federal Reserve’s policy meeting and U.S. retail sales will clarify this week’s economic news.
Monday
Economic data from China is expected to look particularly strong this week as underlying effects compare more smoothly year over year. Retail sales, a key measure of consumption, are expected to grow 31.3% from a year earlier between January and February, according to economists surveyed by the Wall Street Journal. Fixed asset investment appeared to have grown 38.2% from a year earlier, while business output could have declined 30.5% year-on-year. The large annual increases surpass recent growth trends, as China’s economy calmed down in the early months of 2020 as authorities worked to keep Covid-19 there.
Tuesday
U.S. retail sales posted their biggest monthly gain in seven months in January as consumers underwent another round of incentive surveys. February is probably a step backwards. Projections for Tuesday ‘s report are widely known, showing uncertainty. But overall, economists expect the one-time surge in surveys to slow, as bad weather across much of the country held back spending last month.
U.S. industrial output is expected to decline in February, partly due to weather-induced disruption, chip shortages and other snarls in global supply chains. “Demand is strong, however, and we expect the weakness in short-term output to be weak,” said economists at Credit Suisse.
Wednesday
The Federal Reserve will release a revised policy statement and economic projections. U.S. central bank policymakers are likely to update forecasts for gross domestic product, inflation and employment – but also to point a long way to a full recovery and state that there are no plans to raise interest rates. or to tighten policy in the near future.
Thursday
The Bank of England is likely to stand firm this week as policymakers measure the pace of economic recovery and the outlook for inflation. The UK suffered its worst recession in more than 300 years in 2020, but officials expect a strong reversal in the second half of this year.
Unemployment claims in the U.S. are nearing the lowest level since the pandemic hit – but they are still historically high. Little changes in the week ending March 13, with the latest figures on claims for unemployment benefits still showing a high level of layoffs across the country.
Friday
Bank of Japan officials will meet Thursday and Friday to review monetary policy. BOJ Gov. Haruhiko Kuroda has said that the bank intended to maintain the overall framework of the current concession, including a negative interest rate policy and the 2% inflation target. The board is ready to consider how to make its mitigation program more effective and sustainable in the aftermath of the pandemic making it more difficult to achieve 2% inflation.
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