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Following the month’s nonfarm disappointment, the Dow Jones and the rest of the US markets will be hoping for stronger signs of an economic recovery this week.

US: How fast is US inflation rising?

Friday’s nonfarm reading was a shocker. Though, in normal times, the creation of 266,000 jobs would be very strong, in the current climate, and compared to expectations of nearly 1 million additions, it’s almost a disaster. Especially since April’s reading was revised from 916,000 to 770,000.

This does mean, however, that worries over the Federal Reserve tapering stimulus any time soon have eased somewhat, as Jerome Powell is now a few months off – at least – from seeing a ‘string’ of robust jobs reports.

Attention will now turn this week to the CPI and retail sales data on Wednesday and Friday respectively.

Rising inflation has been a hot topic in 2021, with fears of said inflationary pressures – and what that would mean for interest rates – causing some startling losses at points in the last few months. The most recent figures showed a steady climb, from 0.4% to 0.6% – any increase sharper than that this month could cause a wobble in confidence.

As for retail sales, they smashed it out of the park last month, surging from -2.7% to 9.8%, zooming past the forecast 5.8% while doing so. It may be hard to match that performance this Friday, though anything similar will be cause for celebration.

Elsewhere, the JOLTS job openings figure is on Tuesday, with the usual jobless claims – which finally ducked under half a million last week – on Thursday, and industrial production and consumer sentiment on Friday.

UK: Focus on the economy

The UK saves all its good stuff for Wednesday, when it finally reveals the first look at its Q1 GDP reading.

Though the Bank of England is forecasting growth of 7.25% for the full year, for the first quarter the economy is expected to have contracted by around 1.5% due to the severe lockdown restrictions in place, especially across January and February.

Alongside the quarterly GDP figure on Wednesday is the monthly reading, as well as the industrial and manufacturing production numbers.

As for corporate updates, Morrisons reports on Tuesday, with Coca-Cola HBC and Compass Group on Wednesday, and Burberry and Hargreaves Lansdown on Thursday.

Eurozone

It’s not the busiest week in the Eurozone, with the ZEW economic sentiment readings on Tuesday, region-wide industrial production on Wednesday, and the most recent ECB meeting minutes on Friday.

This article is brought to you in association with Spreadex. All opinions expressed in this article are from the author and do not necessarily represent the opinions of The Armchair Trader. You can find out more about Spreadex products and services here, or find more articles from Connor Campbell here.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Connor Campbell

Connor Campbell

Connor joined Spreadex in 2014 as part of a newly expanded financial analyst team after graduating from the University of Southampton with an MA in English. His focus is on providing Spreadex's customers with up-to-date and informative news, and is responsible for the market analysis found on the Spreadex website.

Connor produces three daily market updates, a daily stock earnings preview, a weekly financial market preview piece every Friday, a round-up of all the big financial stories making the weekend press every Monday morning and regular stock market features.

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