Key Events This Week: CPI, PCE, ADP, Durable Goods And More

With the Fed in their self-imposed blackout period, the economic data will get a chance to do the talking ahead of the March 18th FOMC meeting. Of particular note will be the inflation data, namely Wednesday’s CPI report for February and Friday’s core PCE reading for January, but there will also be some scattered labor market data to help put context around last Friday’s disappointing February employment report. Of course, all of that assumes that traders can be dragged away from the latest Iran war headlines fro more than 5 minutes. 

Turning to this week’s main event, the February CPI report will get top billing. DB’s expectations are for a 1.0% increase in energy prices to boost headline CPI (+0.27% forecast vs. +0.17% previous) relative to core (+0.24% vs. +0.30%). This translates to a year-over-year rate of 2.40% (vs. 2.39% previous), while the latter would tick down by 4bps to 2.46%. Within the CPI basket, DB looks for tariff-related strength in core goods, particularly apparel. In addition, recent gains in wholesale used car prices have the potential to begin adding to price pressures over the next couple of months. On the services side, expect more rental disinflation, though recent upward revisions to the repeat-rent indices suggest caution around the speed at which that can occur. Also look for payback from January’s particularly large increase in airfare prices, though recent moves in energy prices could add to airfares going forward. 

Also of note on the inflation front this week will be Friday’s personal income (+0.4% forecast vs. +0.3% previous) and consumption (+0.1% vs. +0.4%) report for January, which will contain that month’s reading on core PCE, the Fed’s preferred inflation measure. Based on the January CPI and PPI data, DB is expecting a 0.42% increase (vs. +0.36%), which would take the year-over-year rate up a tenth to 3.1%. The Fed will have to wait until the morning of their March 18th meeting for the PPI data to get a more complete read on February’s core PCE. Based on our component-level CPI forecasts, our prior expectation is for a 0.18% February gain, which would have the year-over-year rate decline to 2.8%.

In terms of the labor market data, ADP’s weekly data on Tuesday covering the week of February 21st will provide an initial view on net hiring trends beyond February’s survey week. Similarly, Thursday’s jobless claims and Friday’s January JOLTs release will give additional context on gross labor market flows.

The remainder of the data this week will help forecasters sharpen their views on current quarter growth. Growth data will also feature. Revisions to the second estimate of fourth quarter GDP (Friday) will update the baseline from which to judge early 2026 momentum. Tuesday’s existing home sales (3.81mn vs. 3.91mn) for February and Thursday’s housing starts (1.325mn vs. 1.404mn) and permits (1.450 vs. 1.455mn) for January will provide an update on the residential sector. We will also get a preliminary look into the health of the factory sector with January’s durable goods orders (+0.4% vs. -1.4% headline / +0.4% vs. +0.8% core) on Friday as well.

Friday will also see the preliminary release of the University of Michigan survey for March. While DB expects a decline in sentiment (55.0 vs. 56.6), due to the recent hostilities in the Middle East, also important for the Fed will be consumers’ inflation expectations.

Over in Europe, the focus will be on the monthly GDP for January in the UK (Friday), German January factory orders and industrial production (today) and the trade balance (tomorrow), and February CPIs in Norway and Denmark (both tomorrow).

Rounding out with earnings, there will be reports from Oracle and Adobe in the US as well as Inditex, Rheinmetall, Volkswagen and BMW in Europe. Finally, the focus will be on the Saudi Aramco earnings tomorrow amidst the big rise in oil prices last week.

Fed reaction

The emergence of shale production in the US has helped to limit the impact of oil price spikes on the economy. Indeed, within the Fed’s FRB/US model, a $20/bbl increase in oil prices only increases unemployment by about 2bps and has almost no impact on core PCE inflation. However, with downside risks to the labor market while inflation has run above target for almost five years in a row, the response for the Fed to such a supply shock is not clear. Indeed, looking at the Fed’s prior responses to energy shocks does not yield a regular pattern (see “What does history tell us about the Fed’s response to oil price shocks?”). Sometimes, the Fed emphasized the threat to the inflation side of their dual mandate while other times, it sought to protect against any deterioration in the labor market.

In the current episode, with inflation expected to be on a downward trajectory, the market could give the Fed some leeway to “look through” another supply-side shock. That said, inflation has been too high for too long, and the latest data calls into question how much disinflation can reasonably be expected, especially if there are increases in measures of inflation expectations (e.g., Friday’s Michigan data). On the flipside, growth looks strong but there are concerns on a forward-looking basis, for example, due to the potential for AI to disrupt the labor market.

In summary, the February jobs report, as well as January’s, makes it clear that one month’s data should never be taken in isolation. San Francisco Fed President Daly made this point in the wake of last Friday’s release, noting that while February’s data gives her some concern, all the moving parts like the strike and the change in population controls make it harder to interpret.

While the more dovish members will likely point to the February employment report as justification for more policy support, the Committee, as a whole, will likely need more data to ascertain the underlying state of the labor market. We continue to expect the Fed to cut rates only once this year, should disinflationary pressures become clear in the second half of 2026. However, if February’s weakness is confirmed in subsequent months (not our base case), that could open a path to an earlier reduction

Courtesy of DB, here is a day-by-day calendar of events:

Monday March 9

• Data: US February NY Fed 1-yr inflation expectations, China February CPI, PPI, Japan February Economy Watchers survey, bank lending, January labor cash earnings, BoP current account, trade balance, leading index, coincident index, Germany January factory orders, industrial production
• Central banks: ECB’s Elderson speaks
• Earnings: CATL, Constellation Software, HPE

Tuesday March 10

• Data: US February NFIB small business optimism, existing home sales, China February trade balance, Japan February PPI, machine tool orders, M2, M3, January household spending, Germany January trade balance, France January trade balance, current account balance, Italy January PPI, Sweden January GDP indicator, Norway February CPI, Denmark February CPI
• Central banks: ECB’s Simkus and Muller speak
• Earnings: Saudi Arabian Oil, Oracle, Volkswagen, Partners Group
• Auctions: US 3-yr Notes ($58bn)

Wednesday March 11

• Data: US February CPI, federal budget balance
• Central banks: Fed’s Bowman speaks, ECB’s Guindos and Schnabel speak
• Earnings: Inditex, Rheinmetall, Telecom Italia
• Auctions: US 10-yr Notes (reopening, $39bn)

Thursday March 12

• Data: US January trade balance, housing starts, building permits, Q4 household change in net worth, initial jobless claims, UK February RICS house price balance, Canada January international merchandise trade, building permits
• Central banks: Fed’s Bowman speaks, ECB’s Villeroy speaks
• Earnings: Adobe, Generali, BMW, RWE, Dollar General
• Auctions: US 30-yr Bond (reopening, $22bn)

Friday March 13

• Data: US January PCE, personal income, personal spending, durable goods orders, JOLTS report, March University of Michigan survey, UK January monthly GDP, Germany February wholesale price index, January current account balance, Italy January industrial production, Canada January manufacturing sales, February labour force survey
• Central banks: BoE inflation attitudes survey

Focusing on just the US, Goldman writes that the key economic data releases this week are the CPI report on Wednesday and the durable goods and core PCE reports on Friday. Fed officials are not expected to comment on monetary policy this week, reflecting the blackout period ahead of the March FOMC meeting. 

Monday, March 9 

• No major economic data releases scheduled. 

Tuesday, March 10 

• 10:00 AM Existing home sales, February (GS +0.5%, consensus -0.8%, last -8.4%) 

Wednesday, March 11 

• 08:30 AM CPI (MoM), February (GS +0.18%, consensus +0.3%, last +0.2%); Core CPI (MoM), February (GS +0.17%, consensus +0.2%, last +0.3%); CPI (YoY), February (GS +2.34%, consensus +2.4%, last +2.4%); Core CPI (YoY), February (GS +2.42%, consensus +2.5%, last +2.5%): We estimate a 0.17% increase in February core CPI (month-over-month SA), which would lower the year-over-year rate by 0.1pp to 2.4% on a rounded basis. We expect softer autos inflation, reflecting a 0.5% decline in used car prices, a slight increase in new car prices (+0.2%), and a decline in the car insurance category (-0.3%). We expect a smaller contribution from travel services inflation (airfares: flat vs. +6.5% in January; hotels: +0.5% vs. -0.5% in January), reflecting signals from alternative price data. We forecast a benign increase in the shelter categories (rent: +0.22%, OER: +0.22%), reflecting a continued slowdown in their underlying trend. We expect unchanged medical services prices, reflecting a continued decline in medical insurance prices (-1.0%). We expect upward pressure from tariffs on categories that are particularly exposed (such as recreation) worth +0.05pp. We estimate a 0.18% rise in headline CPI, reflecting higher food (+0.1%) and energy (+0.5%) prices.

Thursday, March 12 

• 08:30 AM Trade balance, January (GS -$63.0bn, consensus -$66.0bn, last -$70.3bn) 
• 08:30 AM Initial jobless claims, week ended March 7 (GS 215k, consensus 215k, last 213k); Continuing jobless claims, week ended February 28 (consensus 1,850k, last 1,868k)
• 08:30 AM Housing starts, January (GS -2.0%, consensus -4.6%, last +6.2%) 

Friday, March 13 

• 08:30 AM Personal income, January (GS +0.6%, consensus +0.5%, last +0.3%); Personal spending, January (GS +0.3%, consensus +0.3%, last +0.4%); Core PCE price index, January (GS +0.39%, consensus +0.4%, last +0.4%); Core PCE price index (YoY), January (GS +3.07%, consensus +3.1%, last +3.0%); PCE price index, January (GS +0.30%, consensus +0.3%, last +0.4%); PCE price index (YoY), January (GS +2.85%, consensus +2.9%, last +2.9%): We estimate that personal income and spending increased by 0.6% and 0.3%, respectively, in January. We estimate that the core PCE price index rose 0.39% in January, corresponding to a year-over-year rate of +3.07%. Additionally, we expect that the headline PCE price index increased 0.30% in January, or increased 2.85% from a year earlier.
• 08:30 AM Durable goods orders, January preliminary (GS +1.0%, consensus +1.1%, last -1.4%); Durable goods orders ex-transportation, January preliminary (GS +0.5%, consensus +0.5%, last +1.0%); Core capital goods orders, January preliminary (GS +0.5%, consensus +0.5%, last +0.8%); Core capital goods shipments, January preliminary (GS +0.6%, consensus +0.5%, last +1.0%): We estimate that durable goods orders increased by 1% in the preliminary January report (month-over-month, seasonally adjusted), reflecting an increase in commercial aircraft orders. We forecast a 0.5% increase in core capital goods orders and a 0.6% increase in core capital goods shipments—the latter reflecting the increase in orders in the prior month.
• 08:30 AM GDP, Q4 second release (GS +1.6%, consensus +1.4%, last +1.4%); Personal consumption, Q4 second release (GS +2.4%, consensus +2.4%, last +2.4%): We estimate a 0.2pp upward revision to Q4 GDP growth to +1.6% (quarter-over-quarter annualized). Our forecast reflects a downward revision to business fixed investment growth based on softer software spending details in the quarterly services survey (QSS) that is more than offset by upward revisions to residential fixed investment and inventory accumulation. We estimate a modest upward revision to consumer spending that leaves the rounded Q4 growth rate unchanged at 2.4%.
• 10:00 AM University of Michigan consumer sentiment, March preliminary (GS 54.5, consensus 55.3, last 56.6): University of Michigan 5-10-year inflation expectations, March preliminary (GS 3.5%, last 3.3%)
• 10:00 AM JOLTS job openings, January (GS 7,000k, consensus 6,750k, last 6,542k)

Source: DB, Goldman