Wednesday is shaping up to be a busy one on the economics front, with two indicators due on manufacturing as well as reports on inflation and home-builder sentiment.
The New York Fed’s Empire State index for May is due at 8:30 a.m., with economists expecting the index to record a slightly positive reading of plus 3.
At the same time, the Labor Department may report the producer price index, a measure of wholesale costs, fell sharply for the second straight month because of lower oil prices.
Economists polled by MarketWatch forecast a 0.7% decline, though core prices excluding food and energy are seen edging up 0.2%.
Inflation at both the wholesale and consumer levels has been muted for the past year, barring occasional but temporary spikes in oil or food costs. A sharp drop in oil prices over the last two months has further eased any pricing pressures.
That’s given the Federal Reserve more leeway to continue a massive bond-buying program aimed at keeping interest rates low and boosting the economy.
The Fed at 9:15 a.m. will report industrial production for April, with a 0.3% drop expected, which would mark the worst monthly performance since April. Utilities usage is likely to weigh on the index, since April temperature returned to normal after a particularly cold March.
“The soft backdrop for industrial output should persist in the coming months, as the economy continues to navigate against the domestic fiscal headwinds and weak global backdrop,” says Millan Mulraine of TD Securities.
An index of sentiment among home builders is expected to rise to 44 in May from 42 in April, supported by improving weather and lower lumber prices, according to economists surveyed by MarketWatch.
The National Association of Home Builders/Wells Fargo housing-market index fell in April.
The last time the index reached above a key reading of 50 was in 2006. Despite April’s decline, the sentiment level among builders was up 75% from a year earlier. The index will be released at 10 a.m.
marketwatch.com
The New York Fed’s Empire State index for May is due at 8:30 a.m., with economists expecting the index to record a slightly positive reading of plus 3.
At the same time, the Labor Department may report the producer price index, a measure of wholesale costs, fell sharply for the second straight month because of lower oil prices.
Economists polled by MarketWatch forecast a 0.7% decline, though core prices excluding food and energy are seen edging up 0.2%.
Inflation at both the wholesale and consumer levels has been muted for the past year, barring occasional but temporary spikes in oil or food costs. A sharp drop in oil prices over the last two months has further eased any pricing pressures.
That’s given the Federal Reserve more leeway to continue a massive bond-buying program aimed at keeping interest rates low and boosting the economy.
The Fed at 9:15 a.m. will report industrial production for April, with a 0.3% drop expected, which would mark the worst monthly performance since April. Utilities usage is likely to weigh on the index, since April temperature returned to normal after a particularly cold March.
“The soft backdrop for industrial output should persist in the coming months, as the economy continues to navigate against the domestic fiscal headwinds and weak global backdrop,” says Millan Mulraine of TD Securities.
An index of sentiment among home builders is expected to rise to 44 in May from 42 in April, supported by improving weather and lower lumber prices, according to economists surveyed by MarketWatch.
The National Association of Home Builders/Wells Fargo housing-market index fell in April.
The last time the index reached above a key reading of 50 was in 2006. Despite April’s decline, the sentiment level among builders was up 75% from a year earlier. The index will be released at 10 a.m.
marketwatch.com
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