In his latest snapshot, Thomas Watts, Investment Analyst, abrdn Portfolio Solutions, comments on the economic data releases we can expect to see this week and which will be of interest to wealth managers. Thomas said:
“The coming week not only brings with it the Cheltenham Festival, a week-long extravaganza of horse racing, but also just as many runners and riders in terms of market data making their way towards the finishing post too.
“Out of the starters gate on Tuesday, the Office for National Statistics brings us a useful piece of employment data in the form of Claimant Count Change numbers, detailing the difference in the number of people claiming unemployment-related benefits from to month. Although the data is generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health, considering consumer spending is so highly correlated with labour market conditions. Due to this, it is unsurprising that the overall unemployment level is also a major consideration for those at Threadneedle Street when considering future rate policy.
“The US Federal Reserve have vowed to remove their blinkers entirely when it comes to inflationary data, refusing to cut rates until they are comfortable that price rises are subsiding in most facets of the economy. Tuesday afternoon should help us get more of a handle on US inflation with Consumer Price Index (CPI) data being made public, the broadest measurement of how prices are adapting in the world’s largest economy.
“It could indeed be a two-horse inflationary race by the second part of the week as the US also releases it Producer Price Index (PPI). Although very similar to CPI, the reading focuses on the change in the price of finished goods and services sold by factories and workshops, dovetailing well with Tuesday’s consumer inflation data to give us a more complete picture.
“Falling at the final hurdle, the UK economy has now indeed fallen into a technical recession recently, experiencing a contraction in Gross Domestic product (GDP) for two consecutive quarters. However, the coming week also provides us with monthly GDP figures, acting a possible indicator of just how long and potentially mild this recession could prove to be. With an election on the horizon for later in the year, the data could prove a tough final furlong for both those in the City of London and City of Westminster.”
