Last week was rather uneventful, with not much to report in terms of market-moving news. Still, markets were encouraged by last week’s unexpected jump in initial weekly jobless claims, which rose to their highest level since August. This was widely viewed as proof that the U.S. labor market continues to cool, supporting the Federal Reserve’s hand in their battle with the sticky inflation.
The markets now see a significant chance for a rate cut in September, despite the continued hawkishness seen in some rate-committee members’ comments. However, this week features several crucial data points that will affect the policymakers’ decisions, such as consumer and producer price indexes. Consumer health will also be in focus, with retail sales data scheduled to be published this week and earnings from two major retailers in the spotlight.
Three Economic Events
Here are three economic events that could affect your portfolio this week. For a full listing of additional economic events, check out the TipRanks Economic Calendar.
» April’s Producer Price Index (PPI) – Tuesday, 05/14 – This report reflects input prices for producers and manufacturers. Since PPI measures the costs of producing consumer goods – directly affecting retail pricing – PPI is seen as a good pre-indicator of inflationary pressures. This makes it a leading indicator for the following month’s CPI. Thus, the PPI directly impacts the overall inflation outlook among policymakers.
» April’s CPI and CPI ex. Food and Energy (Core CPI) – Wednesday, 05/15 – The CPI report is one of the two key indicators used to measure inflation (the second one is the Personal Consumption Expenditures, or PCE). Policymakers, businesses, and consumers closely watch the CPI report, as it reflects the price trends in the economy, shapes consumer spending and business outlooks, and directly affects the Federal Reserve’s policy rate decisions.
» April’s Retail Sales – Monday, 04/15 – This report provides information on the amount of money consumers are spending on various durable and non-durable goods. Retail Sales is a leading indicator, providing an outlook into the current quarter’s economic growth as well as into the inflationary factors on the side of demand.
For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.
