Retail sales and Fed minutes in focus next week

NEW YORK (AP) — New data on retail sales will headline U.S. economic updates this week, but there will also be details from the most recent Federal Reserve meeting and a new read on consumer sentiment.

The latest economic data showed that inflation remains hot. High prices on everything from groceries to clothing and gas have squeezed millions of Americans and cast a shadow over the broader economy. Democrats swept Congress in midterm elections and for many voters, the cost of living was the top issue.

Here’s a look at some of the key reports coming in the week ahead.

Gas prices may cut into spending elsewhere

Retail activity may have slowed last month. Economists expect a 0.2% overall increase, easing back from 0.8% in September and 1.3% in August. At the same time that overall retail sales are slowing, spending at gas stations has surged amid persistently higher fuel costs because of the U.S. war with Iran. The war disrupted shipping traffic through the Strait of Hormuz, slashing global oil supplies and raising prices. That has made gasoline more expensive and indirectly raised costs for anything that is shipped.

Shoppers have been pulling back on spending just as retailers head into the vital holiday shopping season. The squeeze from stubbornly high inflation is expected to persist as long as the war stifles global oil supplies and tariffs from the U.S. trade war with much of the world keep putting pressure on prices.

Hot inflation may force the hand of the Federal Reserve

Details from the Federal Reserve's latest policy meeting will be released Wednesday. The minutes from that meeting could shed more light on the central bank's decision-making process as it tries to cool inflation. It held rates steady at its October meeting following the first rate hike in three years at its September meeting. Raising the benchmark interest rate can help slow economic growth and cool inflation by making borrowing more expensive.

Higher interest rates, though, could also stunt job growth, which has been strong but is showing some signs of weakening. Supporting the labor market is also part of the Fed's mandate along with taming inflation and taking action to support one can often be detrimental to the other. Inflation has remained stubbornly above 3%, which puts it well above the central bank's 2% target rate. The Fed is expected to raise rates again at its December meeting and anxiety over stubborn inflation likely means more rate hikes to follow in 2027.

Jobs remain a key gauge of broader economic health

The latest weekly update on unemployment claims, which are a proxy for layoffs, will be released Thursday. Economists watch them closely because they can provide signs of where the job market is headed. Claims have remained at historically low levels amid a broader jobs market that has remained a strong point in an economy pressured by rising inflation. The resilient jobs market has made it easier for the Fed to focus on raising interest rates to cool inflation.

The last broad employment update for October showed that U.S. employers created a surprising 165,000 new jobs and the unemployment rate dipped to 4.1%. The reports have shown that the job market remains solid, but unspectacular. Employers have added an average of 86,000 jobs a month throughout the year, which is modest by historic standards.

Consumers under pressure ahead of holiday season

The University of Michigan on Friday will release an update to its November consumer sentiment survey. It is expected to remain unchanged from its initial reading, which continued to show that consumers remain pessimistic as they deal with pressure from inflation on household budgets.

Other reports on consumer confidence revealed similar concerns about inflation. The Conference Board's consumer confidence index for October showed some improvement in confidence levels, but they still remain on an overall downward trend. Responses to that survey continued to echo worries about the high costs of gas, goods and services.