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Look ahead at May 6, 2019 week: A thin data calendar that should confirm the labor market is tight and inflation low

The May 6 week has only a scattering of economic data reports. The numbers related to inflation will have some extra importance after the April 30-May 1 FOMC meeting with renewed scrutiny on the price stability side of the dual mandate. The maximum employment side seems to be taking care of itself with sustained low unemployment and little slack remaining at the margins of the labor force.

More interesting may be comments from Fed policymakers. The floodgates opened on Friday, May 3 at the end of the communications blackout period around the meeting last week. There were major conferences on May 3. These were Strategies for Monetary Policy: A Policy Conference at the Hoover Institution at Stanford University and the 2019 NABE International Symposium in Stockholm, Sweden.

Policymakers got to air their respective outlooks for monetary policy as well as preview some of their thinking in advance of the Board of Governors’ June 4-5 Conference on Monetary Policy Strategy, Tools, and Communication Practices to which the Chicago Fed will play host. In the meantime, the week will have remarks from Chicago Fed President Charles Evans (dove, voter), Philadelphia Fed President Patrick Harker (moderate, nonvoter), Dallas Fed President Robert Kaplan (moderate, nonvoter), Atlanta Fed President Raphael Bostic (moderate, nonvoter), and New York Fed President John Williams (moderate, voter). All of these have spoken recently and there should be little fresh in their comments. Chair Jerome Powell is also scheduled to appear on Thursday at 8:30 ET but he is not likely to address monetary policy in his “brief opening remarks” to the research conference on “Renewing the Promise of the Middle Class”. Vice Chair for Supervision Randal Quarles (moderate) speaks at 11:35 ET on Tuesday about “Financial Regulation” and also is unlikely to speak about monetary policy. Governor Brainard (dove) will speak twice. She first gives opening remarks at 8:30 ET on Wednesday at an event at the Richmond Fed and then on Friday at 8:30 ET in opening remarks on the second day of the community development research conference.

The economic data over the course of the week probably will not have more than passing interest until the release of the April Consumer Price Index at 8:30 ET on Friday. It is preceded by the Final Demand Producer Price Index for April at 8:30 ET on Thursday. Of the two, the CPI has more implications for monetary policy.  Fedwatchers will be looking for direct evidence of transitory factors that kept the reading for the core PCE deflator low in March, and if these are indeed of a nature to be temporary.

Initial jobless claims data for the week ended May 4 at 8:30 ET on Thursday should be moving past any difficulties in seasonally adjusting around the Passover/Easter holiday variability. The level of new claims is expected to remain in the low 200,000’s as businesses make some decisions regarding staffing against concerns about more elevated risks to the economic outlook even though the present seems to be in good shape. There is also the need to adapt to a lack of skilled workers in some industries which may lead to automation rather than filling current open positions.

However, the March numbers for Job Openings and Labor Turnover (JOLTS) at 10:00 ET on Tuesday should confirm that there remains near-record job openings, brisk hiring, low separations, and many workers ready to voluntarily leave one job for another.

The data on international trade in goods and services for March at 8:30 ET will incorporate a revision to the advance trade balance for goods-only of $71.447 billion and fresh numbers for the trade balance of services.  After that, there may be some adjustment to the outlook for the second estimate of first quarter GDP for its release at 8:30 ET on Thursday, May 30.

Whetstone Analysis will be looking for two reports on Monday. Neither has a set release day or time.

If the usual pattern holds, the Federal Reserve will release the April Senior Loan Officer Opinion Survey at 14:00 ET on Monday. It will help illuminate conditions around the standards and terms of consumer and business loans, as well as the borrowing demand.

Boeing usually releases its numbers on commercial aircraft orders for the prior month on the first Monday somewhere around midday. Aircraft orders are likely to be few for April. Boeing has to address the damage to its reputation and product after the disasters with its once-popular 737 MAX aircraft. Potential buyers for Boeing units are probably not anxious to sign contracts until Boeing has credibly done so. Also, since the crashes, some contracts may have been cancelled. It will be hard to tell if Boeing has recovered until the major airshows later this year: Paris (June 17-23), MAKS (July 1), and Dubai (November 17-21).


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