Economy Week Ahead: Inflation in Focus

U.S. and China consumer prices, plus the European Central Bank’s announcement on interest rates, highlight this week’s slate of economic releases.

Tuesday

The U.S. trade deficit hit a record high in March, as demand from consumers and businesses fueled a surge in imports.

The trade gap in April is forecast to have narrowed for the first time since October 2021, with several factors likely at play, including supply-chain disruptions related to Covid-19 lockdowns in China and rising exports of both goods and services.

Thursday

The European Central Bank is expected to confirm plans to end a bond-purchase program and start raising interest rates this summer, in an effort to quell record-high inflation.

ECB President

Christine Lagarde

last month outlined the policy shift that would end an eight-year experiment with negative rates despite concerns about faltering economic growth amid fallout from the war in Ukraine.

Friday

Economists estimate that China’s consumer-price index edged higher in May because of rising pork prices and disruptions related to Covid-19 lockdowns, though overall inflation pressure in the country still appears muted.

Producer prices, a measure of factory-gate inflation, are forecast to have eased.

The U.S. consumer-price index for May will offer the last major inflation reading before the Federal Reserve’s June 14-15 meeting.

It might not offer much comfort. Rising fuel prices and supply-chain disruptions related to Russia’s invasion of Ukraine are forecast to have kept headline inflation elevated. Core prices, which exclude sometimes-volatile food and energy prices, also likely remained well above the Fed’s comfort zone.

—Bingyan Wang contributed to this article.

Write to Jeffrey Sparshott at jeffrey.sparshott@wsj.com