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Black Friday, Spending Put U.S. Consumer in the Spotlight

David Goodman
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Black Friday, Spending Put U.S. Consumer in the Spotlight

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It’s a big week for the U.S. consumer, and not just because of the annual retail extravaganza of Black Friday.

A report on Wednesday will show how resilient U.S. consumer spending was in October following revised third-quarter GDP figures. The nation will also see data on consumer confidence and durable-goods orders ahead of Thursday’s Thanksgiving holiday.

Throw in the biggest retailing day of the year, and U.S. Federal Reserve Chairman Jerome Powell’s first speech since his meeting with President Donald Trump on Nov. 18, and you have a week that could help set the economic tone for the remainder of the year.

“The focus on consumers is intensifying for two reasons: One, economic growth is particularly dependent on them at present. As the accompanying figure illustrates, there has been little expansion of economic activity outside of consumer spending in recent quarters. Two, consumers have shown signs of diminished momentum of late.”

--Bloomberg Economics’ Carl Riccadonna, Yelena Shulyatyeva, Andrew Husby and Eliza Winger

Here’s what happened last week and below is our weekly wrap of what’s going on in the world economy in the coming days:

The U.S. and Canada

The U.S. is set for a short but busy week as economic releases and central bank speeches are crammed in before Thanksgiving. A deluge of data kicks off on Tuesday with reports on consumer confidence and new home sales, while the next day sees durable goods, GDP and PCE inflation releases, as well as the publication of the Beige book.

Meanwhile, Monday sees the Powell speaks in Providence, Rhode Island, in what are likely to be his final comments before the Fed enters its pre-meeting blackout, and Lael Brainard discusses the Fed’s policy framework review in New York.

In Canada, third-quarter GDP data out on Friday will reveal the extent of an expected slow down in growth in the second half of this year, with big implications for the central bank’s future policy path.

For more, read Bloomberg Economics’ full Week Ahead for the U.S.

Europe, Middle East and Africa

The week sees multiple speeches by ECB officials, including Chief Economist Philip Lane, that follow in the wake of Christine Lagarde’s first official remarks on policy since becoming president. Attention will then turn to economic data, with reports due on euro-zone inflation and German unemployment.

In the U.K., election campaign silence from the Bank of England coincides with a quiet week for data, allowing political posturing on competing economic visions to take precedence in the eyes of the market.

By contrast, Africa’s central banks will be making plenty of noise, with policy makers convening in Ghana, Kenya, Nigeria, Mauritius and Angola. The focus will be on Kenya, where the removal of a controversial law that capped borrowing costs may give the central bank room to ease on Monday, while Angola will set policy on Wednesday for the first time since allowing the currency to float freely in October.

The Bank of Israel is also meeting on Monday, when it could complete a remarkable u-turn. If officials elect to ease policy, they’ll have gone from a shock hike last November to returning rates to all-time lows as they struggle with a dovish shift from major central banks and a deteriorating global outlook.

For more, read Bloomberg Economics full Week Ahead for the EMEA

Asia

Reserve Bank of Australia Governor Philip Lowe is set to give a speech on Tuesday on ‘Unconventional Monetary Policy: Some Lessons from Overseas.’ That’ll be closely watched given increasing speculation among economists that the RBA will soon head down the unconventional route.

India Growth Slowdown Argues for Greater Policy Support

Central banks in South Korea and Sri Lanka also set policy on Friday, wile India posts GDP numbers at the end of the week, with early forecasts suggesting growth probably hit a new low last quarter of below 5%. On Saturday, China posts is first official data for November.

For more, read Bloomberg Economics’ full Week Ahead for Asia

Latin America

Activity continues to remain flat in Mexico, where the final figure of the GDP for third-quarter will be released on Monday. On Wednesday the central bank publishes its quarterly inflation report and one day later the minutes of the Nov. 14 meeting, when Banxico cut its rate to 7.5%, will be released.

Argentina Economic Activity to Point to 3Q GDP Drop

Argentina will publish on Tuesday its Economic Activity index for September, whereas Brazil releases the unemployment rate and the budget balance figures for October.

For more, read Bloomberg Economics’ full Week Ahead for Latin America

--With assistance from Craig Stirling, Juan Pablo Spinetto, Malcolm Scott, Benjamin Harvey, Margaret Collins and Theophilos Argitis.

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editors responsible for this story: Simon Kennedy at skennedy4@bloomberg.net, Zoe Schneeweiss, Scott Lanman

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