The Business Week Ahead

The FOMC is the week's highlight and is expected to be headlined by a rate hike and perhaps warnings over the risks of inflation and asset bubbles. Wage inflation will be the focus of the JOLTS report on Monday amid high levels of job openings and lagging rates of hiring. The week's biggest reading on inflation will come on Wednesday with the CPI report where, however, the core is once again expected to come in flat. The end of the week will see major releases with November retail sales on Thursday and the first definitive information on holiday shopping and industrial production on Friday and the first hard data on the November factory sector.

Monday

JOLTS: Job Openings for October

Consensus Forecast: 6.100 million

Consensus Range: 6.050 to 6.110 million

At 4.1 percent, the unemployment rate is low and consistent with full employment which is also the signal from the JOLTS report where job openings have been running very strong, over 6 million at 6.093 million in September. Econoday's consensus for October job openings is 6.100 million.

Tuesday

Small Business Optimism Index for November

Consensus Forecast: 104.2

Consensus Range: 104.0 to 105.9

The small business optimism index has been holding near expansion highs boosted by strong confidence in the economic outlook and significant plans to increase capital outlays. Econoday's call for November is 104.2 vs 103.8 in October.

PPI-FD for November

Consensus Forecast, Month-to-Month Change: 0.3%

Consensus Range: 0.2% to 0.5%

PPI-FD Less Food & Energy

Consensus Forecast, Month-to-Month Change: 0.2%

Consensus Range: 0.1% to 0.3%

PPI-FD Less Food, Energy, & Trade Services

Consensus Forecast, Month-to-Month Change: 0.3%

Consensus Range: 0.2% to 0.3%

Inflation for wholesale trade services, which is considered an advanced indication for wider price pressures ahead, has been very evident in the last two producer price reports, helping both the overall headline and the less food and energy reading post 0.4 percent gains each in both October and September. Prices for legal services and healthcare showed special traction in October. A notch less strength is the call for November as forecasters see the PPI-FD rising 0.3 percent, the less food and energy rate up 0.2 percent, and up 0.3 percent for less food, energy and trade services.

Treasury Budget for October

Consensus Forecast: -$134.0 billion

Consensus Range: -$146.0 to -$74.1 billion

The Treasury opened fiscal year 2018 with an October budget deficit of $63.2 billion, 40 percent larger than the $45.8 billion deficit in October last year. The larger deficit reflected an 11.6 percent yearly increase in outlays to $298.6 billion that outpaced a 6.2 percent increase in receipts to $235.3 billion. The Econoday consensus for November's Treasury deficit is $134.0 billion.

Wednesday

Consumer Price Index for November

Consensus Forecast, Month-to-Month Change: 0.4%

Consensus Range: 0.2% to 0.5%

Consumer Price Index

Consensus Forecast, Year-on-Year Change: 2.2%

Consensus Range: 2.0% to 2.3%

CPI Core, Less Food & Energy

Consensus Forecast, Month-to-Month Change: 0.2%

Consensus Range: 0.2% to 0.3%

CPI Core, Less Food & Energy

Consensus Forecast, Year-on-Year Change: 1.8%

Consensus Range: 1.8% to 2.0%

Aside from hurricane-related swings, consumer inflation has been fundamentally flat including October when the monthly rate rose only 0.1 percent while the year-on-year rate fell 2 tenths to 2.0 percent. The core, which excludes food and  energy, rose 0.2 percent with this yearly rate inching up 1 tenth to 1.8 percent. Wireless service prices, which have fallen steeply this year, have been rebounding in recent months but have been offset by weak prices for vehicles. For November, forecasters see the overall CPI rising 0.4 percent with the less food & energy rate at 0.2 percent. Year-on-year, the CPI is seen rising 2.2 percent with the core at 1.8 percent.

Federal Funds Target for December 12 & 13 Meeting

Consensus Forecast, Midpoint: 1.375%

Consensus Range: 1.25% to 1.50%

The economy is at full employment and the Federal Open Market Committee appears guaranteed to raise its federal funds target for a third time as planned this year. Econoday's panelists all see the target rising 25 basis points to a range of 1.25 to 1.50 percent. Quarterly FOMC forecasts will be of special interest and whether they reflect any early expectations for tax cut stimulus.

Thursday

Initial Jobless Claims for December  week

Consensus Forecast: 239,000

Consensus Range: 225,000 to 240,000

Initial claims are expected to come in at 239,000 in the December 9 week vs 236,000 in the December 2 week. After coming down sharply in the prior week, claims from Puerto Rico rose sharply to over 7,000 with the Labor Department warning of remaining backlog from Hurricane Maria.

Retail Sales for November

Consensus Forecast: 0.3%

Consensus Range: 0.2% to 0.5%

Retail Sales Ex-Autos

Consensus Forecast: 0.7%

Consensus Range: 0.5% to 0.9%

Retail Sales Ex-Autos Ex-Gas

Consensus Forecast: 0.4%

Consensus Range: 0.2% to 0.6%

Retail Sales Control Group (Ex-Food Services, Ex-Autos, Ex-Gas, Ex-Building Materials)

Consensus Forecast: 0.4%

Consensus Range: 0.1% to 0.6%

After jumping on hurricane-driven gains for autos and gas, retail sales settled back to earth in October with only a 0.2 percent gain and mostly moderate details throughout. For November, unit auto sales slowed which points to trouble for the motor vehicle component. Special interest will be paid to department store and nonstore data to measure the success of Black Friday and Cyber Monday. Retail sales in November are expected to rise 0.3 percent with ex-auto sales much higher at 0.7 percent. Two core readings -- less auto & gas and control group sales -- are both expected to post solid increases of 0.4 percent.

Import Prices for November

Consensus Forecast, Month-to-Month Change: 0.7%

Consensus Range: 0.3% to 1.0%

Export Prices

Consensus Forecast, Month-to-Month Change: 0.3%

Consensus Range: 0.2% to 1.0%

Cross border prices, like other inflation readings, have been flat, up only 0.2 percent for October imports and unchanged for October exports. Prices for petroleum and for agricultural products both rose sharply in October but couldn't help the month's overall totals which were once again held back by weakness in finished prices. But Econoday's consensus for November does call for an oil effect on import prices, where the consensus is calling for a 0.7 percent gain, with export prices at a moderate 0.3 percent.

Business Inventories for October

Consensus Forecast,  Month-to-Month Change: -0.1%

Consensus Range: -0.2% to 0.2%

Business inventories have been climbing solidly in line with underlining sales but are expected to ease back in October. Lower inventories during a time of rising economic demand point to the need for restocking and are a plus for employment and production. Forecasters see a 0.1 percent draw for October inventories.

Friday

Empire State Index for December

Consensus Forecast: 19.4

Consensus Range: 14.7 to 25.0

Empire State slowed in November in what was a welcome result given this year's long run of unsustainable strength in this report. Yet readings were still very strong with the headline index coming in at 19.4 with December's consensus also at 19.4.

Industrial Production for November

Consensus Forecast, Month-to-Month Change: 0.3%

Consensus Range: 0.1% to 0.5%

Manufacturing Production

Consensus Forecast,  Month-to-Month Change: 0.3%

Consensus Range: 0.2% to 0.5%

Capacity Utilization Rate

Consensus Forecast: 77.2%

Consensus Range: 76.9% to 77.3%

Though choppy through the hurricane season, industrial production snapped back with a 0.9 percent gain in October while the manufacturing component, after posting a solid September gain, surged 1.3 percent. Forecasters see easing in November with the consensus gain  at 0.3 percent for both total production and manufacturing production.