South Korea’s August consumer price inflation is increasingly likely to re-enter the 3% range due to base effects from last year’s telecom fee discounts. Over the same period, the United States will release its first nonfarm payrolls report since the Jackson Hole symposium, drawing attention to how inflation pressures and slowing employment will shape the Federal Reserve’s monetary policy direction.
This week will also bring a series of releases from South Korea: next year’s budget proposal, industrial activity indicators, and balance of payments statistics. Overseas, U.S. employment, manufacturing and services data, the Federal Reserve’s economic assessment, eurozone inflation, and major economies’ GDP figures are seen as key variables for financial markets.
South Korea’s Inflation, Fiscal, and Export Indicators
The National Data Agency will release August consumer price trends on September 2. July’s consumer price inflation came in at 2.8% year-on-year, dipping below 3% for the first time in three months. However, with the base effect from last August’s mobile telecom fee discounts fading, observers suggest August inflation could climb back to around 3%.
The inflation trajectory is a critical indicator not only for the Bank of Korea’s future rate decisions but also for assessing household real purchasing power and the pace of domestic demand recovery. If the increase comes in higher than expected, policy pressure on price stability could intensify, though whether this reflects temporary base effects or sustained supply- and demand-side pressures will require examining movements across detailed item categories.
The South Korean government is also set to unveil next year’s budget proposal this week. Under the National Finance Act, the budget must be submitted to the National Assembly by September 3 — 120 days before the start of the fiscal year. Market attention is focused on the possibility that total expenditure will exceed 800 trillion won (approximately $583.3 billion) for the first time, reaching an “800 trillion won plus alpha” level.
The budget is also expected to include the size and operational plan for a “Future Response Fund,” to be financed by separately earmarking tax revenue windfalls from the semiconductor boom. While expanded fiscal spending could support economic stimulus, its impact on inflation and national debt is likely to be a key point of contention during parliamentary review.
Statistical authorities will also release July industrial activity data. In June, industrial production, consumption, and investment all increased, marking the first so-called triple increase in three months. Whether production and domestic demand indicators improved again in July will serve as a benchmark for gauging the sustainability of South Korea’s economic recovery.
The Bank of Korea will publish July balance of payments data on September 4. The cumulative current account surplus for the first half of this year reached $191.01 billion, the largest on record. If semiconductor export momentum continued, July’s monthly current account surplus likely remained at an elevated level.
South Korea Key ReleasesScheduled DateMarket FocusAugust Consumer Price TrendsSeptember 2Whether inflation re-enters 3% rangeJuly Industrial ActivityThis weekWhether production, consumption, investment recovery continuesJuly Balance of PaymentsSeptember 4Current account surplus driven by semiconductor exportsNext Year’s Budget ProposalThis weekWhether total expenditure exceeds 800 trillion won
Note: Release schedule compiled based on provided materials.
The biggest variable for U.S. financial markets is the August nonfarm payrolls report due Friday. July nonfarm payrolls fell by 23,000, but August is expected to show job gains of 65,000 to 80,000. The unemployment rate is forecast at 4.1% to 4.2%, suggesting no significant change.
Average hourly earnings are expected to rise 0.3% to 0.4% month-on-month, with annual wage growth holding at around 4%. If job gains come in stronger than expected and wage growth remains solid, the Federal Reserve’s policy stance prioritizing price stability could strengthen. Conversely, if employment slowdown becomes pronounced, market concerns about continued tightening could ease.
At the Jackson Hole symposium, Federal Reserve Chair Kevin Warsh reportedly expressed concern about elevated inflation. Provided overseas materials quoted Warsh as saying, “Inflation is running above our 2 percent target. So, the Fed’s predominant focus right now should be on prices.” Analysts at German investment banks assessed that a rate hike is the most likely policy outcome at the September 16 Federal Open Market Committee meeting.
However, a single labor market indicator will not determine the policy path. The U.S. July Job Openings and Labor Turnover Survey, August ADP private payrolls, and the Institute for Supply Management’s manufacturing and services indices will also be released. ADP August private payrolls are expected to show an increase of 47,000. The Federal Reserve’s Beige Book and remarks from Fed Governor Christopher Waller will also provide material for assessing regional economic conditions and inflation pressures.
U.S. Key IndicatorsRelease TimingMarket Forecast or Watch PointAugust Nonfarm PayrollsFriday65,000–80,000 increase expectedAugust Unemployment RateFriday4.1–4.2% expectedAugust ADP Private PayrollsWednesday47,000 increase expectedAugust Manufacturing PMITuesday55.8–56.4 forecastFed Beige BookWednesdayRegional economic and inflation assessment
Note: U.S. employment forecasts reflect market expectation ranges provided in source materials.
Outside the United States, eurozone August consumer prices will be released Tuesday. The annual inflation rate is expected to rise from July’s 2.9% to 3.3–3.4%, which could support expectations for a European Central Bank rate hike in September. The Bank of Canada is widely expected to hold its benchmark rate at 2.25% on Wednesday.
Second-quarter GDP figures for India and Australia will also be released. India’s growth rate is expected to slow to 7.3–7.5% from Q1’s 7.8%, while Australia is forecast to grow 0.3–0.4% quarter-on-quarter, translating to annual growth of 1.8–1.9%. Brazil’s quarterly growth is also expected to moderate to 0.4–0.5% following strong Q1 performance.
This week’s indicators will test how well employment and growth hold up amid resurgent inflation. If U.S. employment remains solid and eurozone inflation rises further, tightening expectations for major central banks could strengthen, affecting bond yields and dollar flows. Semiconductor company Broadcom’s earnings release is expected to offer an opportunity to confirm whether AI and data center investment demand continues to underpin performance across related sectors.