Reports from the US and the eurozone on gross domestic product for the first quarter will show how both economies fared in a period marked by sharp rises and falls in Covid-19 cases, rising inflation and the start of Russia’s attack on Ukraine. ‘
U.S. factories have been caught between strong demand and stretched supply chains during the Covid-19 recovery. March data on durable goods – products designed to last for at least three years – are expected to reflect a recovery for new orders after a weak February.
The Bank of Japan is expected to leave its ultra-low interest rate targets unchanged. Japan’s economy is still smaller than its pre-pandemic level, while “cost-push” inflation is hurting corporate profits as Japanese companies struggle to pass on the higher costs to consumers.
A key measure of US economic growth is expected to decline sharply in the opening months of 2022. Gross domestic product is expected to increase by less than 1% in the first quarter, down from 6.9% quarterly growth at the end of last year. year. The overall figure adjusted for inflation is likely to reflect rising prices, a growing trade imbalance and slower inventory growth, which masks the relative strength of private consumption, business investment and real estate.
Figures to be released by the EU Bureau of Statistics are expected to signal a gloomier outlook for the eurozone economy following Russia’s invasion of Ukraine, with growth slowing again in the first quarter and the annual inflation rate remaining high in April. Economists expect inflation to hit a record 7.5%, up from 7.4% in March.
US consumer spending fell sharply in February as households saw wage increases eroded by rising inflation. Economists predict an increase in spending for March as Covid-19 continued to decline and consumers spent more on services such as air travel and dining. The Federal Reserve’s preferred inflation target, coupled with consumer spending figures, could show underlying price pressures as it declines, still close to a four-decade high.
The U.S. labor cost index – a measure of wages and benefits paid by employers – is expected for the first quarter to show another stretch of strong wage increases, giving the Fed more evidence that a tight labor market is contributing to the 40-year high for inflation.
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Appeared in the print edition on April 25, 2022 as ‘Economic Calendar’.