- UK retail borrowing data could underline lack of confidence amongst consumers
- Eurozone inflation data could raise concerns if unemployment rate plateaus
- Will US wage growth show signs of slowdown?
The week kicks off with the Bank of England’s Consumer Credit data for October. There’s a degree of concern that the general public are lacking the confidence to borrow and spend right now, which could hike fears of a wider slowdown in the new year. Expectations are for the number to dip back into negative territory after six consecutive positive prints, with a reading of around £-500 million being forecast, down from the £+200m seen for September.
The latest German Inflation data for November will also be released on Monday, which will arguably serve as something of a curtain raiser for the Eurozone-wide data that’s due on Tuesday. Policymakers continue to struggle with rising prices and there’s mounting opinion that this won’t be a transitory spike. The real test will be in the employment data that’s due later this week, with the ECB being happy to tolerate inflation if it’s creating jobs, but there’s concern that this isn’t the case. A reading as high at 5% could be seen, up from the 4.5% posted in October.
Eurozone Inflation data will be released on Tuesday, with expectations that this will broadly align with the number from Germany. Again, the challenge is the same that if this isn’t driving wider economic growth then further stimulus measures from the central bank will have to be deployed at a time when others are looking at tightening monetary policy. Forecasts suggest a print of around 4,.5% will be seen, up from the 4.1% in October.
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Wednesday sees the publication of the ADP Payroll Survey for October with the typical pre-cursor to Friday’s US non-farm payrolls. Expectations are for a relatively stable 500,000 or so jobs to have been added and anything much above this could hike concerns that the US economy is continuing to run a little hot. There’s more granular detail over wages due at the end of the week, but too punchy a figure here will likely heighten calls for the Fed to act faster.
On Thursday, Eurozone Unemployment data for October will be published. The concern here is that after months of steady declines, this will now plateau and as noted above, such a scenario leaves the ECB in a challenging position. Despite rising inflationary pressures, there will be growing calls for further stimulus measures to be deployed in order to bolster economic growth. Forecasts suggest that the number will be close to the 7.4% posted in September.
Rounding out the week, we have a raft of employment data from the US. Although the Non-Farm Payrolls headline here, other valuable metrics include the unemployment rate – forecast to hold steady at just under 5% – and November’s average hourly earnings. These are expected to remain relatively subdued and if the forecast of 0.3% month-on-month is returned, this again has the potential to present a challenge for policy makers. That’s well short of the current inflation rate and given the seemingly inevitable uptick in borrowing costs, numbers like this could serve to dampen consumer confidence going into the year end.