Economics: Home sales report and inflation outlook

(The Center Square) – This week’s economic calendar includes several important housing reports, including existing home sales, housing starts, and building permits. But the most consequential releases are likely to be the first reading on February consumer inflation and the delayed January report on personal consumption expenditures, or PCE, the Federal Reserve’s preferred inflation measure. Together, they will help answer the central economic question of the moment: can the Fed respond to a weakening labor market, or will inflation remain high enough to keep policymakers cautious? Last week’s jobs report made that question more urgent. The labor market is no longer simply cooling from an unsustainably strong pace. It now looks close to stalled. Payroll employment fell in February, prior months were revised lower, and hiring remains concentrated in a narrow set of industries. Even accounting for temporary factors, labor demand has clearly lost momentum. That matters bec