Economic outlook Up next for the markets: March 21 - March 25

Inflation is soaring and oil prices are spiking following widespread sanctions brought against the Russian fossil fuels sector, sending gas prices to near-record highs. Analysts expect both inflation and rising commodity prices to weigh on consumer spending and sentiment.

The market will get a broader look at the impact of the geopolitical unrest, with a series of consumer-focused economic data points scheduled for release. One such item is the Johnson Redbook Index, which samples thousands of U.S. retailers to track same-store sales. When the reading falls, it indicates consumers are reigning in spending. The durable goods report, which tracks orders and shipments of big-ticket items, and new home sales from last month are also due. Both reports provide further insight into consumer demand.

Initial and existing jobless claims will also be published, which measures how many people are out of work at any given time. Rounding out the week’s economic data, the University of Michigan is set to publish its final Consumer Sentiment Index reading for March, with recent surveys indicating inflation and rising oil prices are weighing on people’s minds.

Tuesday, March 22:

The Johnson Redbook Index for the previous week is scheduled to be released. This piece of economic data tracks the growth in year-over-year same-store sales from a sample of about 9,000 U.S. retailers. It provides early insight into potential changes in consumer spending patterns. With prices for most goods and services on the rise, the Redbook reading will provide insight as to how inflation may be weighing on consumer spending.

Wednesday, March 23:

New home sales for February are slated to be released by the U.S. Census Bureau. This monthly data point tracks the number of new houses sold in any given month. In January, 801,000¹ new homes were sold, down 4.5% from the previous month. Rising mortgage rates and soaring home values seemingly priced some buyers out of the market. Home prices haven’t cooled off much since then, which may end up being reflected in February’s numbers.

Thursday, March 24:

Durable goods for February are scheduled to be reported by the U.S. Census Bureau. This report tracks orders and shipments of big-ticket items on a monthly basis. This data point measures industrial activity, providing investors a look at the health of the nation’s supply chains. In January, new orders for durable goods increased 1.6% to $277.5 billion.² Shipments were up 1.2% to $270.4 billion.

Initial and existing unemployment claims for the previous week are also set to be released on Thursday. The labor market has been especially tight lately, amid what some economists are calling the “Great Resignation.” As COVID-19 case numbers have fallen in recent months, jobless claims have been on a general decline.

Friday, March 25:

The University of Michigan’s final consumer sentiment reading for March will be released. This leading indicator gives investors a view into how consumers are feeling about the economy and their finances. This data point will be particularly telling amid soaring inflation and the geopolitical unrest abroad, as gas prices, in particular, have left consumers feeling the pinch. Last month’s consumer sentiment fell by an eye-popping 8.2%,³ the most in a decade.