Wages and Prices Could Show a Cool-Down Before a Fed Meeting
Government data on Friday will provide one final update on inflation, spending and wages before the Federal Reserve's interest rate decision next week.
Forecasters expect data from the Labor Department to show that a key measure of wages and salaries increased about 4.6 percent in the first quarter from a year earlier. While that would be a modest slowdown from the end of last year, the growth would be faster than a pace that policymakers consider sustainable, given their concern that quick pay gains could help fuel future inflation.
Commerce Department data, also set for release on Friday, is expected to show that inflation eased somewhat in March but remained uncomfortably high, while consumer spending most likely slumped or may have even fallen.
Investors will scrutinize the data for clues about where the economy is headed, and how the Fed will react. Most observers expect the central bank to raise rates a quarter of a percentage point on Wednesday, continuing an aggressive campaign to bring inflation to heel. But just as important will be what monetary policymakers signal about the path for the rest of 2023 — and that is likely to be shaped by incoming economic data and financial developments.
Source: The New York Times
