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PCE inflation, consumer confidence: What to know this week

Emily McCormick · Reporter
Sun, February 20, 2022, 11:43 AM

After stocks endured a second straight week of selling last week, investors will be looking to a slate of fresh economic and earnings data as a catalyst for a potential reprieve.

The U.S. stock and bond markets will be closed Monday in observance of the Presidents Day holiday, so new data releases will be consolidated to the later part of the week. And updates on tensions in Russia and Ukraine will also remain in focus throughout the week after stocks sank to their lowest levels in a month on Friday, amid concerns about the escalating geopolitical conflict.

While the emerging threat of military conflict has overshadowed many other worries in the markets, inflation has still remained a central issue for investors. Inflation has implications both in informing the speed at which the Federal Reserve tightens monetary policy, and the extent to which consumers pull back on spending and slow overall economic activity in response to rising prices.

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On Friday, the Bureau of Economic Analysis will release its monthly personal consumption expenditures (PCE) deflator, offering a fresh print on the extent of price increases across the recovering economy. ... Consensus economists expect the PCE to post a rise of another 0.6% in January, according to Bloomberg data, accelerating from December's 0.4% increase. This would represent a 14th consecutive monthly increase, and bring the index up by 6.0% on a year-over-year basis. This, in turn, would mark the fastest increase since 1982, and also accelerate from December's 5.8% annual rise.

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