This week, investors can expect reports from big-box retailers including Walmart, Target, Home Depot, and Macy’s, along with Census Bureau data on national retail sales for October. We’ll also get the latest updates on consumer inflation and the housing market, with the October Consumer Price Index, last month’s housing starts, and the NAHB’s Housing Market Index for November.
Another looming threat to the economy is the undecided national budget. Congress passed a temporary resolution at the end of September to keep the government funded through Nov. 17. If Congressional leaders fail to pass a series of spending bills—or another temporary resolution—by Friday, a shutdown could be imminent.
Retail Earnings and Sales
This week, we’ll get earnings reports from major retailers like Walmart, Target, Home Depot, and Macy’s, which could offer more insights into the robust consumer spending that powered GDP growth in the third quarter. On Wednesday, the U.S. Census Bureau will issue data on national retail sales for October, which could indicate whether this momentum continued into the fourth quarter. Retail sales, which are not adjusted for inflation, were likely flat in October after rising 0.7% in September.
October Inflation Reports
We’ll get the latest updates on inflation this week, starting with the October Consumer Price Index (CPI) on Tuesday. Consumer prices likely rose just 0.1% last month, according to projections from the Cleveland Fed, after gaining 0.4% in September. They’re projected to have risen 3.3% from the same period last year, decelerating from a 3.7% annual gain in September. Core prices, which exclude volatile food and energy costs, likely rose 0.3% last month—matching September’s pace—and are expected to be up 4.2% from October last year. On Wednesday, the BLS will report the Producer Price Index (PPI) for October, tracking inflation from the standpoint of firms that provide goods and services. PPI inflation is often considered a leading indicator of consumer prices, as businesses tend to pass on higher costs to consumers.
A Looming Government Shutdown?
If Congressional leaders fail to come to a funding solution before Friday, up to a million federal workers may be furloughed or forced to work without pay, while certain programs like the Supplemental Nutrition Assistance Program (SNAP) and disaster relief could be cut or sharply reduced due to lack of funding. A shutdown could also affect the nation’s economy. Goldman Sachs estimated in September that a federal shutdown could shave 0.2 percentage points off the nation’s gross domestic product (GDP) for each week the shutdown lasts, as unpaid federal workers would be forced to curtail their spending. However, earlier this week Goldman said they think it’s unlikely to get to the point of shutdown in this round of funding talks.