Economy Week Ahead: Inflation and Retail Sales in Focus

Wednesday

The U.S. consumer-price index for June will offer a key inflation reading before the Federal Reserve’s July 26-27 meeting. Economists surveyed estimated that inflation picked up in June, both from the month before and from June of last year. The CPI rose 8.6% in the year ended in May, the fastest pace in more than four decades.

The Fed’s periodic compilation of business anecdotes from around the country, known as the Beige Book, will offer details about the latest effects of high inflation, labor-market tightness and uncertainty regarding the economy through the early summer.

Figures to be released by the U.K.’s statistics agency are expected to show that the economy contracted for a third straight month in May, underlining the blow the economy has suffered as surging energy prices weaken household spending power.

Thursday

New applications for unemployment benefits, a proxy for layoffs, have trended higher in recent weeks, hitting the highest level since January, but still remain near historic lows. Economists expect the Labor Department to report a slight decrease for the week ended July 9.

The Labor Department’s producer-price index, which measures what suppliers are charging businesses and other customers, is forecast to have increased 0.8% in June from the prior month, the same pace as in May.

Friday

Economists expect the Commerce Department to report that Americans’ retail spending rose in June, after declining in May.

U.S. industrial production—which measures factory, mining and utility output—is estimated to have grown more slowly in June than in May.

The University of Michigan will publish an initial reading of its consumer survey for July. Economists expect the report to show that there was a slight uptick in consumer sentiment in July from June’s final reading, when it fell to its lowest point on record.

Economists expect the Commerce Department to report that U.S. business inventories increased in May at the same pace as the prior month.

China’s National Bureau of Statistics is set to release second-quarter gross domestic product data. Economists polled by The Wall Street Journal expect to see 0.9% growth from a year earlier, a slower pace than the 4.8% growth in the first quarter of the year.

Retail sales in China, a key gauge of consumption, are estimated to have fallen 1% in June from a year earlier, narrowing from the 6.7% loss in May.

Industrial production in China is forecast to have increased 4.4% last month, after a 0.7% advance in May.

Fixed-asset investment in China is estimated to have risen 6% in the first half of the year, compared with a 6.2% increase in the January-to-May period, according to a poll of economists.

—Paul Hannon and Bingyan Wang contributed to this article.

Write to Bryan Mena at [email protected]