The economic data calendar will be fairly busy over the course of this week. The highlights are expected to be in numbers related to the housing market and consumer confidence. While the second estimate of first quarter GDP is set for release on Thursday and an upward revision is generally forecast. The second quarter is already well-advanced, however, and markets will be more concerned with more recent numbers. SIFMA has recommended an early close in US bond markets on Friday, so once the morning's economic data is out of the way, the three-day Memorial Day weekend will have essentially begun. The second estimate of first quarter GDP is set for release Thursday. The preliminary report placed growth at a disappointing 1.8%. However, upward revisions are expected due to higher consumer spending. Nonetheless, the second quarter is almost 2/3 over, and this data will be relatively old and of less immediate importance to markets that some of the other reports during the week.
Personal income and spending for April on Friday should show incomes rose modestly, while spending was a bit higher in part due to non-durables, which includes gasoline prices. The PCE deflator will probably be consistent with another notch up in the rate of inflation. The last monthly indexes for consumer confidence in May are due Tuesday for the Conference Board's Consumer Confidence Index and Friday for the final reading of the Reuters/University of Michigan Consumer Sentiment Index. The early May reports suggest that consumers are somewhat more optimistic than they were in April, but that may have deteriorated with the bad news about natural disasters in the Midwest. The report on durable goods orders in April are due Thursday and covers a month in which new orders for aircraft plunged. A steep drop in the transportation component is likely to pull the headline number down. The manufacturing surveys from the Richmond Fed and Kansas City Fed will provide a little more information about conditions in the factory sector in May, adding to the already released numbers from the New York and Philadelphia Fed Districts. Activity is likely to continue to expand at a respectable pace, but...Read more
