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  • US Inflation expected to remain well ahead of wage growth
  • UK GDP bounce in November may mask impact of COIVD surge before Christmas
  • Eurozone unemployment set to plateau near long term lows


The week starts with the November Unemployment Rate for the Eurozone countries. Although this number has been steadily declining since last Spring, it could now stagnate around the 7.3% posted in October. That in itself shouldn’t cause too much concern as it’s in line with longer term historical lows and the reading has never been below 7%. However, more scrutiny will be applied to metrics such as youth unemployment, something which needs to be tackled to ensure longer term support of the European project.

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On Tuesday, the UK BRC Sales Monitor for December will offer some insight as to consumer behaviour in the run up to Christmas. Renewed concerns over COVID will have arguably taken some demand out of seasonal sales, but consumers are also battling against rising inflation which could serve to artificially inflate this reading. Expectations are that the print will be marginally softer than the 1.8% seen in November, a number which itself was bolstered by Black Friday sales, so unless there’s an overshoot then this doesn’t paint the best picture for consumer confidence.


US Inflation will be in focus on Wednesday with the December reading set to be published. This is expected to come in ahead of the 6.8% seen in November and will likely cause a fresh wave of concern given that average wages are rising at less than 5%. Whilst some will point to abnormal market conditions in the wake of the COVID pandemic as being responsible here, this argument is starting to look a little tired given the persistent pressures. If there’s no change then consumer demand will inevitably fall.


Keeping with a theme, Thursday sees the release of US PPI data for December. As we have noted previously, this inevitably filters down into consumer price inflation and the annualised figure is expected to be nudging 10%. There may be some shreds of hope with the month-on-month reading set to at least show a slowing rate of growth, but as with the consumer inflation print above, this combined with a more hawkish stance from the Federal Reserve paints a challenging backdrop for at least some consumers.


On Friday, the latest UK GDP readings for November will be in focus and there’s a degree of optimism here that a meaningful uptick could be delivered on an annualised basis. A month ago this showed 4.6% and there’s an expectation it could come in closer to 8%, but gains could be short lived given the pre-Christmas squeeze seen on the services sector.

Rounding out the week, US Retail Sales for December are due. These are tipped to be steady on a monthly basis at around 0.3%, but given the fact this number isn’t adjusted for inflation, again it could be seen as something of a red flag and needs to be taken into account rather than focusing purely on the annualised reading.

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

Tony Cross

Tony Cross

Tony Cross is a market commentator with over 15 years of experience, producing compelling, insightful copy for journalists and investors alike. Focusing on macroeconomics, UK blue chip equities and inter market analysis, Cross's commentary is well regarded for its clarity and ability to cut through the waffle. He has been quoted in publications as diverse as The Financial Times, The Times, The Guardian and The Sun. He has also been a regular guest on both Share Radio and TipTV.

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