Major economic data will reset recession bets this week todayheadline

The economy is starting to look weak. Wall Street is stressed by all the volatility in the financial markets. The big immediate issues are tariffs and the potential for huge job cuts in federal government payrolls. 

Not just that tariffs and job cuts are coming but, in addition, what’s concerning for many is the haphazard way that the Trump Administration is making decisions. 

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The stock market slumped last week as a result. The Standard & Poor’s 500 Index fell 3.1%, its worst weekly loss since September. The Nasdaq was briefly down 10% from its February all-time highs. Costco Wholesale  (COST)  fell 6.1%, while Palantir Technologies  (PLTR)  rose 5.5%.

Early futures trading on Sunday suggested the market weakness will resume on Monday.

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Earlier Sunday, President Trump conceded the transition — his phrase for massive cuts in federal payrolls — may even result in a recession. (A note: A recession can be serious or it can be a blip that affect some parts of the country more than others.) 

And Commerce Secretary Howard Lutnick later said 25% tariffs on steel and aluminum imports from the European Union would be imposed on Wednesday. 

Many businesses and investors are nervous. “Politics and uncertainty shouldn’t-drive longer-term market trends,” wrote Seattle money manager Jon Markman. 

The slapdash Trump management isn’t what many expected. FactSet noted that 259 S&P 500 companies raised the tariff question on earnings calls from Dec. 15 through March 16 — the highest number raising the question over the last 10 years.

The Wall Street Journal is so unhappy about the tariffs that, last week, the paper editorialized it’s not sure Trump legally can do what he’s doing. So, the Journal said, someone should take the administration to court. 

All that said, three big economic reports are due this week, and they may affect economy over roughly the next two weeks. 

Inflation is the week’s watchword. 

Two reports on inflation will come from the Labor Department:

• The Consumer Price Index report for February, due Wednesday before U.S. markets open.
• The Producer Price Index for February, due Thursday, again before markets open.  

Both should show smallish gains. The year-over-year CPI gain should come in at 2.9% to 3%. Core CPI will come at 3.2% year over year. The CPI measures a basket of common expenditures and regularly criticized because it give a big weight housing costs.

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The Producer Price Index is expected to show a 0.3% change, down from 0.4% in January. Year over year, the index is expected to be 3.3%, a tiny improvement over the January report. 

The third report to watch is the University of Michigan’s Consumer Sentiment report.

This report, due Friday, offers insights on how consumers are feeling about current economic conditions and their future expectations. The Michigan Survey in January showed steeply declining confidence. 

This may offer a clearer picture of how many Americans view the impact of Trump Administration spending and budget priorities. 

The closely watched report is released twice: early in the month and then revised later with more data. 

Many economists also will watch the Thursday report on initial jobless claims. It’s to show a gain, in part because of government layoffs as well as a new wave of corporate job cuts. 

Last week’s jobs report from the Labor Department showed federal employment falling by 10,000, but the DOGE team was just getting started.

More Economic Analysis:

• U.S. consumers are wilting under renewed stagflation risks
• Jobs reports provide critical look at economy, could roil markets
• Fed inflation gauge indicates big changes in key economic driver

What comes after these 

These reports set up important reports in the week of March 17. These include 

The Federal Reserve’s meeting on interest rates on March 18-19. The central bank is expected to leave its key interest rate unchanged at 4:2% to 4.5% because inflation remains well above the Fed’s 2% inflation target. Fed Jerome Powell said Friday the economy is “in a good place” and he sees no reason to preemptively cut rates.

Housing. The Commerce Department’s February reports on housing starts and building permits. Due March 18 as the Fed meeting starts.

Existing homes sales report. Due from the National Association of Realtors on March 20. Online brokerage Zillow  (Z)  see sales at a 4.1 million annualized rate, unchanged from 2023 and 2024. Mortgage rates are still a problem for many buyers. 

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