The May jobs report is behind and a Federal Reserve meeting is on tap later this month. If the economic calendar were a baseball game, this week feels like the seventh-inning stretch. That's leaving aside indications that the economy has apparently cooled here a bit as the weather has, by contrast, warmed up.
We're not quite into the "dog days of summer" mode yet, but this could be a preview.
This week's likely highlights include:
- Retail sales for May from the government, due 8:30 a.m. Thursday (all times Eastern).
- Producer price index for May from the Labor Department, due 8:30 a.m. Friday.
- Industrial production for May from the Federal Reserve, due 9:15 a.m. Friday.
Economy alive and not unwell
With the release of the May jobs report on Friday, the economy essentially sent a message: "The reports of my death are greatly exaggerated." The Labor Department said that employers added 175,000 jobs last month, virtually mirroring the average number of jobs created over the previous 12 months. The unemployment rate rose slightly to 7.6 percent.
While the overall recovery in the United States remains subpar by historical standards, a recovery has continued nonetheless. That was underscored by last week's Beige Book survey from the Federal Reserve, which described slight to moderate gains in consumer spending across most of the country. An improving housing market and rising stock prices have provided positive underpinnings for consumers.
As for this report, Sam Bullard, senior economist with Wells Fargo, looks for a slight improvement. "Driven by rebounding motor vehicle sales, we expect total retail sales to increase 0.3 percent in May from the 0.1 percent rise recorded in April. Ex-auto, retail sales should edge up 0.1 percent," says Bullard.
Smokestacks and power lines
Although not as sexy as some of the other data points (assuming one loves numbers), the Federal Reserve's industrial production reading is a key gauge of manufacturing, utility and mining output. Manufacturing has begun to struggle a bit lately, so this report could be more important than usual. For example, the recent Institute for Supply Management snapshot covering manufacturing for May showed the first month of contraction since November of last year. It was also the weakest since June 2009.
Chief economist Chad Moutray, with the National Association of Manufacturers, says, "We are hoping to see a pickup in industrial production at some point later this year. Right now, however, we continue to see weak growth in the manufacturing sector both domestically and globally."
Inflation, what inflation?
Although Americans continue to face plenty of economic challengers, broad-based inflation has not been one of them. That's expected to be reflected in this week's producer price index, the main gauge of inflation at the wholesale level. For central banks, deflation has been more of a worry lately. When the Labor Department reported the PPI for April, it declined 0.7 percent and was up less than 1 percent over the previous 12 months.
This week in business history: Riding around on a rail
Summer is prime time for theme parks. It was on June 14, 1959, that Disneyland's Monorail system opened in the Tomorrowland section of the Anaheim, Calif., park. It originally required an "E" ticket for a ride. General admission has since replaced the complex ticket system used then. Although the monorails were a vision of the future back in the time of President Dwight Eisenhower, they are still mostly associated with amusement rides. One successful example of a real mass transit system is the Tokyo Monorail and modern iterations include the magnetic levitation train, or maglev system.
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