Economy Week Ahead: Housing, Consumers, Inflation

Thursday

U.S. jobless claims in recent weeks have fallen to the lowest levels in more than half a century, reflecting an unusually tight labor market. Economists expect first-time applications for unemployment benefits, a proxy for layoffs, to remain exceptionally low in the week ended Dec. 18 as employers try to hold on to workers.

U.S. consumer spending likely increased in November, boosted by job gains and rising wages, high levels of household saving, and inflationary pressures that are causing prices to advance at the fastest pace in almost 40 years.

The Commerce Department’s consumer spending report also includes a key measure of inflation, the personal-consumption expenditures price index. Economists estimate that core inflation, which excludes often volatile food and energy prices, rose at the fastest annual pace in almost four decades in November. Hot inflation is one reason the Federal Reserve is winding down pandemic-era stimulus and setting the stage for higher interest rates next year.

U.S. new-home sales are expected to climb in November. The market for newly built homes is experiencing the same broad forces as existing homes, while builders have been held back from meeting demand by rising costs for supplies, shortages of materials and trouble attracting enough workers.