Data on prices, personal income to be released

Investors better have rested up over the long weekend. This week may be short, but it’s heavy on data that span employment, housing, manufacturing, consumer sentiment and inflation.

The upcoming flood of reports will help decide whether inflation and the economy are rising at paces that investors are comfortable with.

If either inflation or growth is clocking in too fast, the Federal Reserve may refrain from lowering interest rates this year, or even hike them further, which would dampen spending and potentially hurt the stock market. On the other hand, data showing an abrupt halt in growth could also give investors pause.

Mixed housing data caused Wall Street to retreat Thursday, contributing to the Dow Jones industrial average’s drop of 0.4% last week, the Standard & Poor’s 500 index’s 0.5% loss and the Nasdaq composite index’s 0.1% decline.

Wall Street will be taking a particularly careful look at the Commerce Department’s personal income and spending report for April, which includes the core personal consumption expenditures index, the Fed’s preferred inflation gauge. The market projects the year-over-year figure will hold steady at 2.1%, according to the median estimate of economists surveyed Friday by Thomson Financial.

Personal income is expected to have risen 0.3%, less than March’s 0.7% advance, and consumption is expected to have increased 0.5%, stronger than March’s 0.3% gain.

More numbers

On Tuesday, the Conference Board releases its May index of consumer confidence. The index is expected to come in at 105.0, up from last month’s reading of 104.0.

Also Tuesday, the Dallas and Chicago Feds release their indexes of regional manufacturing, and Standard & Poor’s releases its home price index.

On Wednesday, the Fed’s Open Market Committee releases minutes from its May 9 meeting, when the central bank repeated its assessment that growth was slowing and inflation remained “somewhat elevated.” Investors will be interested in the reasoning behind the statement and whether it offers any clues about future rate decisions.

The next day, the Commerce Department will estimate first-quarter gross domestic product. Economists anticipate growth of 0.7%, down from the 1.3% projected in April. The Commerce Department will also report on construction spending, which is expected to have slipped 0.2% in April after rising 0.2% in March.

Meanwhile Thursday, the Labor Department reports on the jobs picture. Economists anticipate that nonfarm payrolls rose by 140,000 in May, a bigger increase than in April, and that the unemployment rate held steady at 4.5%.

Also Thursday, the Chicago Purchasing Managers releases its manufacturing index. Economists expect the index to rise to 55.0 in May from 52.9 in April.

On Friday, in addition to the personal spending and income data, the University of Michigan’s May consumer sentiment index will be released. The market expects it to come in at 88.7, the same as in April.

Another key report Friday will be on the Institute for Supply Management’s May manufacturing index, which is expected to come in at 54.3, indicating a rate of expansion similar to April’s reading of 54.7.

Also Friday, major automakers release their sales figures for May; the National Assn. of Realtors reports on pending home sales for April; and the Kansas City Fed releases its regional manufacturing index.

Earnings reports

Retailers Costco Wholesale Corp. and Sears Holdings Corp. and computer maker Dell Inc. release financial results Thursday.

The market projects Costco’s fiscal third-quarter profit will come in at 56 cents a share. Costco closed at $56.40 on Friday, at the upper end of its 52-week range of $46 to $58.70.

Sears is expected to post first-quarter profit of $1.22 a share. Sears closed at $179.42 on Friday, in the middle of its 52-week range of $134.56 to $195.18.

Analysts predict Dell will report first-quarter profit of 26 cents a share. Dell closed at $25.99 on Friday, at the upper end of its 52-week range of $18.95 to $27.89.

*

Today

Stock markets closed for

Memorial Day.

Tuesday

Conference Board reports on consumer confidence for May.

Wednesday

Federal Reserve’s Open Market Committee releases minutes from its May 9 meeting.

Thursday

Commerce Department reports on gross domestic product for the first quarter and construction spending for April.

Labor Department reports on jobless claims for May.

Chicago Purchasing Managers reports on manufacturing for May.

Quarterly earnings reports due from Costco, Sears and Dell.

Friday

National Assn. of Realtors

reports on pending home sales for April.

University of Michigan reports on consumer sentiment for May.

Institute for Supply Management reports on manufacturing for May.

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From Times Staff and Wire Reports