Prices, spending and confidence — it’s the consumer in focus for investors and the Federal Reserve in the week ahead.
First up is Monday’s report on consumer inflation. The August data are likely to show price hikes have cooled for the second month in a row, primarily thanks to lower gasoline prices. Still, people continue feeling the pinch of higher prices compared to a year ago. And cooler energy prices may be masking hotter inflationary trends continuing to burn away at consumers’ spending power.
The Federal Reserve Bank of Cleveland calculates an inflation rate that focuses on categories that are less volatile each month. It gives a cleaner picture of the underlying price pressures and their sustainability. In July, the official Consumer Price Index showed no change in inflation from a month earlier. However, the Cleveland Fed’s measurement had median inflation moving up another half percentage point.
