Fed’s last yearly meeting, CPI, economic reports, jobless claims will give better idea on US economy

A very busy week of economic data awaits investors headlined by inflation and consumer prices.

The highlight of the week will be the Federal Reserve’s final scheduled policy meeting of the year, with central bankers widely expected to raise the overnight bank lending rate by half a percentage point on Wednesday following four meetings in a row of aggressive 75-basis point hikes. 

The other headliner this week will be the November Consumer Price Index report, scheduled for release Tuesday at 8:30 a.m.

In that report, the Bureau of Labor Statistics is expected to say the consumer price index jumped 0.3% month-over-month in November, slightly below the 0.4% growth in September and October. 

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On a year-over-year basis, watch for the report to show prices climbed 7.3% in November, easing back from October’s cooler-than-expected 7.7% growth rate. That would be the lowest reading since January, and the fifth month in a row of slowing annual growth since June’s 9.1% surge, which marked the highest inflation rate in almost 41 years (November 1981). 

Factoring out volatile food and energy costs, the core consumer price index is anticipated to rise 0.3% in November, matching October’s increase. 

Annually, the core Consumer Price Index is forecast to rise 6.1% in November. That’s down slightly from a cooler-than-expected reading of 6.3% in October. It would also mark the second month of slowing growth from September’s 6.6% increase, the highest in 40 years (August 1982). 

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On Friday, the November Producer Price Index report showed wholesale price growth slowing, but not as much as the markets were hoping for. Stocks sold off at least 0.7% to finish at session lows, with the Dow ending the week at a one-month low.

Other key reports due out on Thursday include initial jobless claims and November retail sales.

In addition, watch for two major regional manufacturing reports and November industrial production data, also out on Thursday.