The Employment Situation report on Friday from the Labor Department sent stocks sizzling upward on Friday as the number of new jobs and unemployment rate signaled that the Federal Reserve will unlikely slow their efforts to stimulate the U.S. economy. The economic ledger will be relatively barren this week until Thursday, so it looks like momentum will rule early in the week to guide market direction. As the weekend approaches, market moving economic data will include:
Initial Jobless Claims for the Week Ended June 8 – The Labor Department reported in its last weekly report that first-time filings for jobless benefits in the week ended June 1 dropped by 11,000 to a seasonally adjusted 346,000 from an upwardly revised 357,000 (up 3,000) the week prior. The four-week moving average, a less volatile gauge of labor trends, rose by 4,500 to 352,000, pushing slightly above the 350,000 mark that economists consider a level of moderate jobs growth. For the most recent week, economists are predicting a slight increase to 350,000 claims.
Retail Sales for May – In April, retail sales rose edged up 0.1 percent compared to March, despite dropping gasoline prices. In March retail sales had fallen 0.5 percent from February. Excluding auto sales (which were up 1.0 percent in April), retail sales were down 0.1 percent. Retail sales are closely watched as they make-up about two-thirds of gross domestic product. For May, economists are expecting a strong month with core sales predicted to rise 0.5 percent and sales less autos forecast to climb 0.3 – 0.4 percent.
Producer Price Index for May – The Labor Department said that the PPI, a measure of the changes in prices to produce goods and services, fell 0.7 percent and 0.6 percent in April and March, respectively. The so-called Core PPI, which excludes the volatile food and energy components, rose 0.1 percent in April and 0.2 percent in March. Economists are expecting the core PPI to improve by 0.1 percent in May and the overall PPI to rise 0.2 percent.
Industrial Production for May – Last month, the Federal Reserve reported that industrial production (which covers activity in manufacturing, mining and electric and gas utilities) dropped by 0.5 percent in April on a month-over-month basis, following a rise of 0.3 percent in March. The closely watched manufacturing component declined by 0.3 percent. Economists are expecting industrial production to rise 0.1 – 0.2 percent in May.