The US Department of Labor’s report on consumer prices for July is at the center of this week’s economic data.
China’s producer price index is likely to stay high in July after seeing its highest increase in nearly 13 years in May. Economists polled by the Wall Street Journal predict that the PPI, a measure of ex-factory gate prices, will rise 8.8% year over year, just like last month. The consumer price index is expected to decline 0.8% year over year due to declining pig prices, compared to the 1.1% increase in June.
US consumer prices are likely to rise more slowly in July than in June. Inflation runs hot as rising demand collides with the clutter in the supply chain and shortages of materials and labor. The Federal Reserve is betting that increased inflation rates will be temporary, a key principle of its easy money policy.
The UK economy is expected to expand for the fifth straight month in June, driving growth into positive territory in the second quarter after a strong Covid-19 vaccination campaign and steps to reopen the economy. Gross domestic product fell in the first quarter after coronavirus cases intensified and the government reinstated restrictions, keeping the overall economy 8.8% below pre-pandemic levels.
Unemployment claims in the US have settled at levels almost double the pre-pandemic average. Economists forecast a slight decline in new unemployment benefits in the week ending August 7, reflecting an improving but not yet fully healed labor market.