The Week Ahead
RETAIL SALES Thursday, June 12, 8:30 a.m.EDT -- Retail sales probably increased by 0.4% in May, according to the median forecast of economists surveyed by MMS International, one of The McGraw-Hill Companies. The modest increase is suggested by a small gain in motor-vehicle buying for the month and weekly reports from other retailers that showed a rebound in shopping. The MMS economists expect that, excluding cars, store receipts probably rose by 0.3% in May. In April, when individuals paid a record $134.3 billion in federal taxes, total retail sales fell 0.3%, and nonauto buying was down 0.1%. Retail buying accounts for about one-third of the entire economy, so a weakness in store purchases generally suggests that the overall economy is slowing this quarter. BUSINESS INVENTORIES Friday, June 13, 8:30 a.m.EDT -- The MMS survey expects that inventories held by manufacturers, wholesalers, and retailers grew a small 0.2% in April, half the 0.4% increase in March. But the gain could be larger because factories have already reported a 0.6% rise in their April stock levels. Business sales likely increased 0.5% in April, after falling 0.3% in March. That's suggested by 1.2% jump in factory shipments. Inventories remain lean compared with sales, and inventory building was a prime source of economic growth in the first quarter. Businesses are probably continuing to restock goods this quarter as well. PRODUCER PRICE INDEX Friday, June 13, 8:30 a.m.EDT -- Producer prices of finished goods likely edged up 0.1% in May, after falling energy prices led to a surprise 0.6% decline in the April PPI. Excluding the volatile food and energy sectors, core producer prices likely increased 0.1% after slipping 0.1% in April. Further back in the production process, core prices of intermediate materials and supplies are no longer falling, but the cost of raw materials is still down. The yearly inflation rate for total producer prices and core costs of finished goods stood below 1% in April.
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