(Bloomberg) — After months of seeing very little inflation, US consumers probably experienced slightly faster price growth in June as companies started to pass along the higher cost of imported merchandise associated with tariffs.
Prices of goods and services, excluding volatile food and energy costs, rose 0.3% in June, the most in five months, according to a Bloomberg survey of economists. In May, the so-called core consumer price index edged up 0.1%.
The measure, regarded as a better indicator of underlying inflation, is seen accelerating on an annual basis for the first time since January. to 2.9%.
While Tuesday’s report is likely to show just a little more pass-through of higher US import duties, many economists expect inflation to gradually pick up as the year progresses. At the same time, many merchants are hesitant to ratchet up prices on American consumers exercising more spending discipline in the wake of a cooling job market. It’s a delicate balancing act.
Retail sales figures on Thursday are expected to show only a modest increase in June after two months of declines. Details of the data, which primarily reflects spending on merchandise, will help economists firm up their estimates for second-quarter economic growth.
While consumer demand has shifted into a lower gear along with the labor market, Federal Reserve officials have held off lowering interest rates on concerns higher tariffs will ultimately cause inflation to accelerate. Policymakers next meet July 29-30.
What Bloomberg Economics Says:
“We think the composition of price increases will likely resemble May’s report, with only modest tariff pass-through in goods categories offset by continued softness in services. Scraped price data show a mixed picture, with firming in categories like appliances and furniture, but declines in airfares and used cars.”
— Estelle Ou, Stuart Paul, Eliza Winger and Chris G. Collins, economists. For full analysis, click here
In addition to the Wednesday release of the Fed’s Beige Book, a compilation of anecdotes about regional economies, investors will hear from a number of US central bankers in the coming week. They include Fed Governors Christopher Waller, Adriana Kugler and Lisa Cook.
- For more, read Bloomberg Economics’ full Week Ahead for the US
Looking north, Statistics Canada will release the second of two inflation reports before the Bank of Canada’s rate decision on July 30. The central bank is closely watching core measures, which have accelerated in recent months but cooled slightly to 3% in May.
Elsewhere, the Group of 20 finance ministers meeting in South Africa, consumer-price data from Japan and the UK, and key speeches by British policymakers will be among the highlights.
Click here for what happened in the past week, and below is our wrap of what’s coming up in the global economy.
Asia
A slew of data from Japan and China will be the focus, with key growth and trade indicators from Malaysia to India also in the spotlight.
It begins Monday, when China releases trade figures which will give the latest read of the impacts of US tariffs and potential frontloading of shipments.
The next day, numbers for China’s June new home sales, retail sales and unemployment provide a snapshot of consumers, while second-quarter gross domestic product is forecast at a slower 5.3%, and industrial production figures are set to show the overall health of the economy and a key driver of it.
In Japan, core machine orders and final May industrial production figures are out Monday and are expected to underscore a slowdown in activity. Thursday’s trade data is expected to also be weak.
Inflation figures on Friday will highlight the challenge facing Japan’s central bank, with national consumer price data for June set to show the headline rate slipping to 3.3%.
Growth and trade will be key themes across the region. India reports exports for June on Tuesday, while inflation is seen cooling in data out Monday. Malaysia releases second quarter GDP figures and export data after a weak May.
Singapore likely notched a 0.8% pace of growth in the second quarter, while South Korea’s export and import trade price weakness may continue into June amid weaker demand.
Elsewhere, Indonesia’s central bank is expected to cut its key interest rate.
- For more, read Bloomberg Economics’ full Week Ahead for Asia
Europe, Middle East, Africa
The week’s regional highlight will be the gathering of finance ministers and central bank governors from the Group of 20, the second such meeting since South Africa took over the rotating presidency from Brazil.
The event will again be overshadowed by US tariff threats and the absence of Treasury Secretary Scott Bessent. The world’s largest economy has expressed displeasure with the host’s theme of “Solidarity, Equality and Sustainability,” as well as some of its foreign policies.
Meanwhile, the UK will remain in the focus for markets amid heightened concern about its public finances and after a poor growth number for May, released on Friday.
On Tuesday, Mansion House speeches by Chancellor Rachel Reeves and Bank of England Governor Andrew Bailey will draw attention.
Inflation data for June is released the following day, with economists predicting an outcome stubbornly stuck above 3% for the headline measure, and the services gauge weakening only slightly, to 4.6%. Policymakers may take more reassurance from labor-market numbers on Thursday, which are set to show pay pressures weakening noticeably.
In the euro area, industrial production on Tuesday, along with Germany’s ZEW index of investor confidence, will be among the highlights. Export numbers from the region will be published the following day, with Switzerland’s data due on Thursday. Each may reveal disruption to trade from US President Donald Trump’s tariffs.
Aside from the G-20 meeting, few appearances by European Central Bank policymakers are on the schedule. The governors of Croatia and France will be among those speaking.
In Israel on Tuesday, data will probably show that inflation remained steady at 3.1% last month, according to a Bloomberg survey of economists. That’s still above the country’s official target of 1% to 3%, and may ensure the central bank remains cautious about easing.
In the Democratic Republic of Congo, the central bank may lower borrowing costs for the first time since 2022 as its inflation-adjusted interest rate — at 14.5% — is one of the highest in the world.
Angola on Friday will probably keep its benchmark at 19.5% for a seventh time in a row. Officials will want to assess the impact on inflation of an increase in public-transport fares by as much as 50% after the government raised diesel prices earlier in the month.
- For more, read Bloomberg Economics’ full Week Ahead for EMEA
Latin America
Brazil on Monday reports May output data that’s likely to show further month-on-month slowing as interest rates near a two-decade high drag on Latin America’s No. 1 economy.
A 16th straight quarterly expansion looks to be well within reach, but if Trump makes good on his threatened 50% tariffs, a second-half recession isn’t out of the question.
Two of the region’s other big economies — Peru and Colombia — also post economic activity reports. Both were largely spared a direct hit from Trump’s most recent escalation of tariff tensions.
While Peru is a major exporter of copper, 50% levies on the metal at the US end may do little to dampen demand, since copper plays such a central role in industry and the production of consumer goods.
Rounding out June price readings for Latin America’s big economies, Argentina will all but certainly post a 14th straight month of slower annual inflation, quite likely sinking below 40%.
After monthly consumer price increases decelerated to 1.5% in May, most analysts expect an uptick in June. The median estimate of economists surveyed by the central bank peg the monthly print at 1.8%.
- For more, read Bloomberg Economics’ full Week Ahead for Latin America
–With assistance from Katia Dmitrieva, Erik Hertzberg, Monique Vanek, Robert Jameson, Mark Evans and Paul Wallace.
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