By Theresa Sheehan
PRINCETON (MNI) – Economic data is plentiful in the week ahead
and include critical reports for inflation and the housing and
manufacturing sectors. Federal Reserve officials will largely be out of
the public eye in advance of the FOMC meeting on June 22-23.
The May data for import and export price indexes, the Producer
Price Index, and the Consumer Prices Index is to be released at 8:30 ET
on Tuesday, Wednesday, and Thursday, respectively.
Some import price indexes may get a push higher in May from the
increases in the U.S. dollar in May. However, there will be little
upward pressure on the petroleum component since oil is already priced
in dollars, and the price of oil fell. Export prices should be up
somewhat on increases in food commodities.
For both the PPI and CPI, the declines in energy costs —
particularly gasoline — comes at a time when prices normally rise. The
mismatch in the seasonal adjustment could exaggerate the decreases and
make the overall index look softer than the core. The talk will be of
disinflation, not inflation.
The NAHB/Wells Fargo Housing Market Index for May popped up to 22,
its highest since 22 in August 2007. The June reading is expected at
10:00 ET on Tuesday and may well continue near this level. Although the
housing market remains sluggish, and sales will drop off as the impact
of the homebuyer tax credit program fade, stocks of new housing are so
depleted that some rebuilding is taking place. Note: the NAHB announced
the change to the release time last month.
The demand that improved builders’ optimism in May should be
reflected in the data on housing starts and building permits at 8:30 ET
on Wednesday. Although levels of starts remain quite low they are
continuing to recover.
The New York Fed’s Empire State Survey for June is at 8:30 ET on
Tuesday and the Philadelphia Fed’s Business Outlook Survey is at 10:00
ET on Thursday. These two reports are the earliest monthly looks at
conditions in the factory sector, and are closely-watched. The April
data suggested that some of the burst of energy that marked
manufacturing activity earlier in the year is wearing off, but that
growth continues, albeit more slowly.
Data on industrial production and capacity utilization for May is
at 9:15 ET on Wednesday. All components — manufacturing, utilities, and
mining — are expected to contribute to an increase in output, and
capacity use should creep higher.
Other Economic Data
The Treasury International Capital System (TICS) data for April is
at 9:00 ET on Tuesday. It will provide additional detail on foreign
purchases of US debt and equities.
The Conference Board’s Leading Economic Index took its first turn
down in April after rising for more than a year. The May report at 10:00
ET on Thursday should return the index to positive territory, and it is
possible that an upward revision could erase the scant 0.1% decline in
The Current Account report for the first quarter 2010 is at 8:30 ET
on Thursday, and will tell much the same tale as the international trade
report of a widening in the trade gap over that period, as well as
giving new information on remittances abroad.
Initial jobless claims for the week ended June 12 at 8:30 ET on
Thursday will cover the survey comparison week for June from May.
The report on state and regional unemployment for May at 10:00 ET
on Friday will give some detail to the national number.
Central Bank Activity
The only major central bank meeting on the calendar for next week
is the Bank of Japan on Monday and Tuesday. The Bank’s extremely
accommodative monetary and quantitative easing policies remain in place,
with the possibility that further measures could be taken to ease
There are few Federal Reserve policymakers speaking in public next
week as the traditional news blackout in advance of an FOMC meeting
goes into effect. St. Louis Fed President Bullard will be traveling to
Tokyo and Hong Kong to deliver speeches for the Institute of Regulation
& Risk North Asia on Monday and Tuesday, respectively. Philadelphia Fed
President Plosser will participate in a discussion about bank resolution
at an event in New York on Wednesday.
** Stone & McCarthy Research Associates **