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Personal income and PCE data set up focus on consumer demand, inflation path

Markets will also watch Friday’s benchmark payroll revision, expected to be only modest, alongside next week’s Jackson Hole commentary from Fed Chair Warsh.

Reported · Written up by our desk · Economy

Next week’s economic calendar will put the spotlight on the July personal income and spending report, with expectations for resilient consumer demand and PCE inflation data that suggest easing underlying price pressures, Action Forex said.

The outlet expects Friday’s benchmark payroll revision to show only a modest downward adjustment, indicating labor market conditions tracked more closely to published estimates than in recent years.

Looking outside the United States, Action Forex highlighted Australia’s July CPI report, where higher fuel costs and sticky underlying prices could push inflation up, and Canada’s Q2 GDP report, forecast to show its strongest growth in nearly two years at a 3.3% annualized pace.

For the United States, Action Forex projected nominal personal income to rise 0.3% in July, with any upside surprise potentially tied to proprietors’ income volatility linked to the timing of USDA-related payments. On inflation, it expects a 0.1% gain in the PCE deflator in July, taking the year-over-year rate to 3.6%, and it projects core PCE inflation of 0.2% for the month, leaving the annual rate at 3.3%.

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