The upcoming week promises a flurry of economic data releases, offering a comprehensive view of global economic health. Here's a breakdown of the key events and what they might mean for markets.
A Week of Economic Data
Monday: Quiet start with no major economic events.
Tuesday:
- U.K. claimant count change, average earnings index 3m/y, and unemployment rate.
- Canadian inflation data.
Wednesday:
- U.K. inflation figures.
- FOMC meeting minutes (U.S.).
Thursday:
- Australia's flash manufacturing and services PMIs, employment change data, and unemployment rate.
- Eurozone, U.K., and U.S. manufacturing and services PMI releases.
- Philly Fed manufacturing index, unemployment claims, building permits, and housing starts (U.S.).
Friday:
- U.K. and Canada retail sales m/m data.
- U.S. revised UoM consumer sentiment and inflation expectations figures.
U.K. Labor Market Softening
The U.K. labor market is showing signs of softening, with wage pressures potentially easing. Average weekly earnings for the three months to February slowed to 3.8%, the first time since 2020 when it fell below 4%. Job vacancies have declined to 711,000, the lowest since 2021, and the number of payrolled employees fell by 65,000 compared with a year earlier.
This data suggests that wage growth might be peaking, but Wells Fargo analysts caution against distortions from base effects and the recent National Living Wage increase.
Canadian Inflation and Energy Prices
Canada's inflation picture is complex. The consensus for CPI m/m is an increase of 0.6%, with the annual figure expected to remain at 2.6%. However, analysts from RBC predict a sharp jump in headline CPI to 3.1% due to energy price spikes.
The Bank of Canada will closely monitor whether higher energy prices feed into other inflation measures. For now, core inflation measures appear relatively contained, with food inflation stable and broader core measures expected to edge lower.
Australia's Labor Market Resilience
Australia's labor market is showing resilience despite recent rate hikes. The consensus for employment change is 15,700, with the unemployment rate steady at 4.3%. Recent data suggests steady job gains, but Westpac analysts warn of potential distortions from seasonal factors.
U.S. Housing Starts and Permits
In the U.S., housing starts are expected to cool, driven by weather-related weakness rather than sustained demand deterioration. Building permits have trended lower year-to-date, down 2.6%, with single-family activity most affected by affordability pressures and softer demand.
Canadian Retail Sales Resilience
Canadian retail sales m/m are expected at 0.7%, with household spending remaining steady despite the oil price shock. RBC card transaction data shows resilience in Q1 2026, indicating that consumer spending is holding up despite economic challenges.
This week's data releases will be crucial in assessing the impact of softer wage growth and economic slack on inflation. The Bank of England and Bank of Canada will be key players in shaping monetary policy based on these insights.
