The Business News Week Ahead

The coming week will be centered on the housing sector but starts on Monday with the national activity index and an overall assessment of April's economy followed on Wednesday by an advance assessment of May's economy with a flash set of PMI data. New home sales will be Wednesday's highlight and respectable strength is the call with similarly upbeat results the expectations for FHFA house prices and existing home sales, both of which will be posted on Thursday. Capping the week on Friday will be the durable goods report where core rates, in contrast to the headline, are expected to prove very solid.

Monday

National Activity Index for April

Consensus Forecast: 0.25

Consensus Range: 0.12 to 0.40

The consumer may have been quiet but April was a good month for the industrial sector and especially for employment as the unemployment rate fell 2 tenths to 3.9 percent. Forecasters see the national activity index coming in at 0.25 vs a modest 0.10 gain in March.

Tuesday

Richmond Fed Manufacturing Index for May

Consensus Forecast: 10

Consensus Range: 6 to 16

Rebound into the plus column is the consensus for the Richmond Fed manufacturing index, at 10 for May vs a rare minus 3 in April. This will be the third advance indication on May's factory sector following strong reports from both Empire State and the Philly Fed.

Wednesday

PMI Composite for May, Flash

Consensus Forecast: 54.8

Consensus Range: 54.5 to 55.2

PMI Manufacturing

Consensus Forecast: 56.4

Consensus Range: 55.0 to 56.8

PMI Services

Consensus Forecast: 54.6

Consensus Range: 54.1 to 55.4

Moderate growth has been the steady signal from the PMIs with manufacturing showing increasing strength. The flash May consensus for the PMI composite is 54.8 with PMI manufacturing seen at 56.4 and PMI services at 54.6.

New Home Sales for April

Consensus Forecast, Annualized Rate: 677,000

Consensus Range:  650,000 to 692,000

New home sales surged higher in March and are understandably expected to slow slightly in April, to a consensus 677,000 annualized rate vs April's 694,000. Before the April report, new home sales had been hesitant and slow but following that report, which also included steep upward revisions, the pace turned solid.

Thursday

Initial Jobless Claims for May 19 week

Consensus Forecast: 220,000

Consensus Range: 217,000 to 220,000

Initial claims are expected to come in at 220,000 in the May 19 week in what would be a small increase from 222,000 in the prior week. The 4-week average in the prior week, at 213,250, marked a 49-year low. Low readings in this report are consistent with strong demand for labor.

FHFA House Price Index for March

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

Consensus Range: 0.6% to 0.7%

The FHFA house price index is expected to rise 0.7 percent in March, extending its run of strength this year. At a consensus annualized rate of 5.600 million, The year-on-year rate, at 7.2 percent in February, was just off January's 4-year high at 7.4 percent.

Existing Home Sales for April

Consensus Forecast, Annualized Rate: 5.600 million

Consensus Range: 5.500 to 5.640 million

At a consensus annualized rate of 5.600 million, existing home sales in April are expected to hold onto the strong gains in March and February. Recent gains aside, resale trends have been flat with year-on-year readings still in the negative column.

Kansas City Manufacturing Index for May

Consensus Forecast: 22

Consensus Range: 20 to 25

A modest fall back to 22 is the May consensus for the Kansas City manufacturing index which jumped 9 points in April to 26. Both new orders and backlog orders were unusually strong in April which points to gains for production and employment in the May report.

Friday

Durable Goods Orders for April

Consensus Forecast, Month-to-Month Change: -1.3%

Consensus Range: -2.5% to 1.7%

Durable Goods Orders, Ex-Transportation

Consensus Forecast: 0.6%

Consensus Range: -0.2% to 0.8%

Durable Goods Orders, Core Capital Goods (Nondefense Ex-Aircraft)

Consensus Forecast: 0.5%

Consensus Range: 0.1% to 1.4%

Underlying strength is the call for durable goods orders which, however, is not expected to be evident at the headline level where a 1.3 percent decline is Econoday's consensus, one reflecting expectations that aircraft orders, which have been very strong, will finally pull back. Ex-transportation orders, which exclude aircraft, were flat in March and solid improvement is the call for April, at a consensus gain of 0.6 percent. A decline in core capital goods was a disappointment in the March report and a 0.5 percent rebound is the April consensus.

Consumer Sentiment Index, Final May

Consensus Forecast: 99.0

Consensus Range: 98.8 to 99.3

The consumer sentiment is expected to hold steady at a solid 99.0 in the final reading for May, in what would be little changed from April's 98.8. Year-ahead inflation expectations in this report have been edging higher.