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Fed decision, CPI, PPI, retail sales: Economic data to watch

It is a busy week for economic data as the Consumer Price Index (CPI) will be released on Tuesday, December 12, the Producer Price Index (PPI) will be available on Wednesday, December 13, the Federal Reserve's decision is expected on Wednesday, December 13, and retail sales will be released on Thursday, December 14.

Yahoo Finance's Josh Schafer breaks down what to watch this week. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript


BRAD SMITH: It's a busy week for economic data before the holiday season kicks into gear. CPI and the Fed rate decision they are on the agenda this week. Markets are betting on a soft landing next year, so will the numbers reflect that narrative? For more on this, we've got Yahoo Finance's reporter Josh Schafer here to tell us more. Hey, Josh.

JOSH SCHAFER: Yeah, Brad. So we just had the calendar up there, and I want to just take a closer look at that and point out some of the key data points that we have coming this week. So of course, we have that CPI print tomorrow on Tuesday. That's a reading on inflation. It will be our first reading of inflation for the month of November. PPI on Wednesday, producer prices, what are companies paying, right? And then Fed decision, obviously, on Wednesday is the real highlight.

Thursday, you're going to get a look at the consumer with retail sales, but I want to zoom in today, Brad, on inflation a little bit because that is one of the bigger prints we're going to get this week, and it's the first one that we're going to get on Tuesday. Goldman Sachs had an interesting chart out today, or actually, I'll hit you with the projections first, but we're showing them on the screen, why not, right?

Month over month looking for flat, year over year 3.1%. Then when you take a look at core CPI, economists are expecting a 4% rise in core CPI also month over month flat, though, which is key that has been coming in-- inflation has been falling quicker than people expect, which is the chart that I want to get to here.

When you take a look at this chart from Goldman Sachs, it's PCE, which is a different measure of inflation, but it tells the point of what we're trying to show here. You can see Goldman's current forecast in light blue their. Yellow was their current-- was their former forecast for inflation. So inflation forecasts have been dropping as inflation has been falling quicker than people thought.

The key reason I bring that up, Brad, is because when you look at that orange line there coming across horizontally, right, that's when they think the Fed is going to cut. You can see how much quicker we reach that orange line with the current forecast for inflation. Came up about four months in Goldman's forecast today. So inflation coming down quicker than people think is part of what's driving this narrative that we might get a Fed cut quicker, and so that will be something we're watching for tomorrow.

BRAD SMITH: Yeah. If the graphic didn't come up, I was just going to hold up my paper.

JOSH SCHAFER: Yeah. We could zoom in. You know what I mean?

SEANA SMITH: You're always ready--

BRAD SMITH: I printed it off. You know I printed it off.

SEANA SMITH: Yeah. Yeah. Exactly. One note that you decided to print today. He does. You can always count on him. All right, Josh, thanks so much for breaking that down. Certainly a busy week ahead.