NEW YORK (AP) — A busy week for economic updates is underway, with crucial inflation data and key earnings reports expected to influence consumer confidence and interest rate policies. This comes as the U.S. economy faces global trade challenges and an oil shortage related to the ongoing conflict with Iran, alongside persistent inflation and declining consumer sentiment.
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Consumer confidence continues to fall due to rising prices affecting household budgets. The Conference Board's consumer confidence survey set for Tuesday is anticipated to reveal further declines in October, following a drop to its lowest level in over a decade in September. This decrease reflects the impact of high inflation on spending and planning for many Americans, compounded by uncertainties from trade wars and the heightened costs stemming from the war with Iran that began in 2026, drastically reducing global oil supplies.
On monetary policy, the Federal Reserve is scheduled to conclude a two-day meeting on Wednesday, likely maintaining the current benchmark interest rate following a recent hike in September. The Fed remains vigilant about inflation and may consider future rate increases, with analysts predicting one more hike could occur in December. While higher interest rates aim to curb inflation, they also risk slowing economic growth and impacting job growth in a currently resilient labor market.
The Department of Commerce will release its first estimate of third-quarter economic growth on Thursday, with a modest increase of 1.7% expected—a slowdown from 2.2% growth in the previous quarter. The expected decline in growth is attributed to persistent inflation fueled by rising oil prices and the economic pressures faced by households, who are struggling with increased costs for essential items while average wages remain stagnant.
Additionally, an upcoming update on inflation is projected to show that prices for goods, including gasoline and groceries, surged in September, with economists forecasting a rise in the personal consumption expenditures (PCE) index of 3.7%, up from 3.4% in August. Since the conflict with Iran escalated in February, inflation has surged, particularly affecting the oil market and contributing to rising costs that consumers face daily.
Despite these challenges, retail sales appear robust on the surface, driven primarily by rising prices rather than increased spending volume. Investors will also focus on corporate earnings reports this week, especially from key tech companies such as Alphabet, Intel, and Amazon, which report earnings on Wednesday and Thursday. These reports may provide insights into how inflation is influencing corporate profitability and investment strategies in artificial intelligence technology.
Other notable earnings to watch include reports from UPS and Coca-Cola on Tuesday, and Starbucks, Exxon Mobil, and Chevron later in the week.