The Business News Week Ahead

Inflation is the week's theme led off, not coincidentally, by an employment measure: the JOLTS report where job openings, in an unprecedented sign of labor market tightness, have been exceeding job applicants. Another rise for JOLTS, however flat wage growth may be, could still heat up inflation talk. Two inflation reports that have been showing clear pressure will also be released: producer prices on Wednesday and import & export prices on Friday with both having shown tariff effects. A key report that has not shown much pressure at all, however, will be released Wednesday and that is consumer prices. Another set of modest readings here, which is expected, could hold down rate-hike concerns. Rounding out the week will be consumer sentiment which will offer its own inflation gauge as well the latest on expectations and whether tariff concerns are growing at the consumer level.

Monday

Consumer Credit for May

Consensus Forecast: $12.4 billion

Consensus Range: $10.0 to $22.6 billion

A stronger rise is expected for consumer credit in May than in April, at a consensus $12.4 billion vs April's $9.3 billion. Revolving credit has been flat this year though April did see a slight $2.3 billion increase. For nonrevolving credit, strength in vehicle sales during May hints at a larger increase than April's $7.0 billion.

Tuesday

Small Business Optimism Index for June

Consensus Forecast: 106.0

Consensus Range: 105.0 to 107.2  

The small business optimism index is expected to ease to in June vs May's 107.8 which was the second highest reading in 45 years of data. Strength in May was centered in sales expectations and the outlook for the economy.

JOLTS: Job Openings for June

Consensus Forecast: 6.700 million

Consensus Range: 6.660 to 6.725 million

Job openings have been providing one of the strongest signals of any indicator on the labor market's strength. Forecasters are calling for a 6.700 million total in June, little changed from May's record 6.698 million. For the first time in 20 years of available data, job openings are exceeding the number of unemployed actively looking for work.

Wednesday

PPI-FD for June

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

Consensus Range: 0.1% to 0.3%

PPI-FD Less Food & Energy

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

Consensus Range: 0.2% to 0.3%

PPI-FD Less Food, Energy, & Trade Services

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

Consensus Range: 0.2% to 0.2%

Cooling to a 0.2 percent monthly increase is expected for the June producer price headline following a 0.5 percent surge in May that was fed by a jump for trade services (wholesalers and retailers) and included hikes for energy as well as steel and aluminum. When excluding food and energy prices are also expected to rise 0.2 percent which again is the consensus when excluding food, energy and trade services.

Wholesale Inventories for May

Consensus Forecast, Month-to-Month Change: 0.5%

Consensus Range: 0.3% to 0.6%

Wholesale inventories are expected to rise 0.5 percent in May in line with the reading in the advance report posted late last month. Inventories have been low relative to sales.

Thursday

Consumer Price Index for June

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

Consensus Range: 0.0% to 0.2%

Consumer Price Index

Consensus Forecast, Year-on-Year Change: 2.9%

Consensus Range: 2.7% to 2.9%

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: 2.2%

Consensus Range: 2.2% to 2.3%

Inflation may be showing pressure in the producer and import price reports, but pass through to the consumer has been limited. Forecasters are calling for no more than modest pressure in the consumer price report for June, at a headline monthly gain of 0.2 percent and a core rate increase of also 0.2 percent. Little change is expected for year-on-year rates which are expected to increase 1 tenth overall to 2.8 percent and remain unchanged for core at 2.2 percent.

Initial Jobless Claims for July 7 week

Consensus Forecast: 225,000

Consensus Range: 215,000 to 226,000

Initial claims are expected to come in at 225,000 in the July 7 week vs 231,000 in the prior week. All readings in this report are at or near historic lows and consistent with strong demand for labor.

Treasury Budget for June

Consensus Forecast: -$91.0 billion

Consensus Range: -$173.9 billion to -$80.0 billion

After this year's tax, corporate taxes are contributing less to the receipt ledger while individual taxes are contributing more. Excise taxes and customs duties are also on the rise. Still the Treasury's year-to-date deficit in May was running 23 percent deeper than the prior fiscal year as spending on net interest, defense and Social Security continue to rise. For June, forecasters see the monthly Treasury deficit at $91.0 billion.

Friday

Import Prices for June

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

Consensus Range: -0.2% to 0.4%

Export Prices

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

Consensus Range: 0.1% to 0.3%

Cross-border price pressures have been very heated, rising 0.6 percent for both import prices and export prices the past two reports. Oil-related pressures have been apparent in both with import prices also reflecting higher tariffs for steel and aluminum. But the June consensus calls for cooling, at a 0.2 percent gain for import prices and a 0.3 percent gain for export prices.

Consumer Sentiment Index, Preliminary July

Consensus Forecast: 98.2

Consensus Range: 97.0 to 99.0

Easing expectations, perhaps tied to tariff concerns, have been holding back the consumer sentiment index which nevertheless ended June at a solid 98.2 as the assessment of current conditions proved very strong. Forecasters are calling for no change, at 98.2 for the preliminary reading in July.