Vital Signs: Will Inflation Keep Easing?

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MEETINGS OF NOTE

Monday, May 14, 4 p.m. EDT - Federal Reserve Bank of Dallas President Richard Fisher speaks on the challenges and opportunities of the global service sector at an event sponsored by the U.S.-China Business Council, the American Council of Life Insurers Washington, and the Coalition of Service Industries in Washington D.C.

7:15 p.m. EDT - Federal Reserve Bank of Atlanta President Dennis Lockhart gives the welcoming remarks at the Atlanta Fed's Financial Markets Conference entitled "Credit Derivatives: Where's the Risk?" in Sea Island, Ga.

MEETINGS OF NOTE

Tuesday, May 15, 8 a.m. EDT - Federal Reserve Bank of Atlanta President Dennis Lockhart introduces Federal Reserve Board Chairman Ben Bernanke at the Atlanta Fed's Financial Markets Conference entitled "Credit Derivatives: Where's the Risk?" in Sea Island, Ga.

8:10 a.m. EDT - Federal Reserve Board Chairman Ben Bernanke speaks at the Atlanta Fed's Financial Markets Conference entitled "Credit Derivatives: Where's the Risk?"

9:15 a.m. EDT - Federal Reserve Bank of Boston President Cathy Minehan moderates a panel discussion entitled "Credit Derivatives: The Landscape Today" as part of the Atlanta Fed's Financial Markets Conference entitled "Credit Derivatives: Where's the Risk?"

11 a.m. EDT - Federal Reserve Board Governor Frederic Mishkin moderates a panel discussion on "Credit Derivatives: Micro-Risk Issues" at the Atlanta Fed's Financial Markets Conference entitled "Credit Derivatives: Where's the Risk?"

7:15 p.m. EDT - Federal Reserve Bank of New York President Timothy Geithner gives a speech at the Atlanta Fed's Financial Markets Conference entitled "Credit Derivatives: Where's the Risk?"

9:45 p.m. EDT - Federal Reserve Bank of Kansas City President Thomas Hoenig speaks about monetary policy and the economic outlook before bankers and business leaders in Denver, Co.

ICSC-UBS STORE SALES - Tuesday, May 15, 7:45 a.m. EDT

This weekly tracking of retail sales, compiled by the International Council of Shopping Centers and UBS bank, will update buying activity for the week ended May 12. Sales fell 0.6% for the week ended May 5, after bouncing up 0.5% for the week ended Apr. 28. The yearly pace of growth slowed to 1.7%, from 1.9% for the week ended Apr. 28.

CONSUMER PRICE INDEX - Tuesday, May 15, 8:30 a.m. EDT

The April consumer price index is expected to rise at a slower pace than it did in March. Consumer prices jumped 0.6% in March, on a 10.6% surge in gasoline prices. On a yearly basis, overall consumer inflation grew to 2.8%, from 2.4% in February.

Minus food and energy, consumer prices likely rose at a slower clip. In March, core inflation ticked up by just 0.1% and the yearly pace of overall core inflation eased to a pace of 2.5%, from 2.7% in February. Economists will zero in on rents, which were up 4.6% from a year ago in March. Medical care inflation has also been elevated, up 4% from a year ago in March, as prices zoomed up at an annualized rate of 8.3% in the first quarter.

EMPIRE STATE MANUFACTURING SURVEY- Tuesday, May 15, 8:30 a.m. EDT

The New York Federal Reserve Bank's Empire State Manufacturing Survey probably improved a little more in May. The April reading rebounded to 3.8, after hitting a 22-month low of 1.9 in March. The new orders, shipments, and unfilled orders indexes were weak. Manufacturers in the region appear to be completing many previously unfilled orders, as nearly twice as many respondents report declining levels of unfilled orders than increases. The trend points to weaker activity going forward if new orders don't pick up.

Expectations for the coming six months softened a touch. The general business conditions index was 33.9 in April, from 35.2 in March. The shipments reading backed off its March level of 45.4, to 38. Other important indexes such as unfilled orders, employment, and capital spending also deteriorated in April.

REAL EARNINGS - Tuesday, May 15, 8:30 a.m. EDT

Inflation-adjusted weekly earnings of production workers probably dropped 0.5% in April. That's based on the consensus forecast of a 0.4% gain in the April consumer price index, driven by higher energy prices, and a 0.1% dip in average weekly earnings. Real earnings eased 0.1% in March, after holding steady in February. Compared to the same period a year ago, inflation-adjusted earnings slowed to a 1.6% gain from 1.8% in February.

JOHNSON REDBOOK INDEX - Tuesday, May 15, 8:55 a.m. EDT

This weekly measure of retail activity will report on sales for first fiscal week of May, ended May 12. Sales for the full month of April were off 4.1% compared to March. In March, sales were up 1% compared to February.

HOME BUILDERS SURVEY - Tuesday, May 15, 1 p.m. EDT

The National Association of Home Builders and Wells Fargo bank will release its May Housing Market Index. The report measures housing market conditions by surveying builders' on current sales, buyer traffic through model homes, and expectations for sales during the next six months. Builders were less optimistic in April, with the overall reading sliding back to 33. In March the level was 36, and February's was 39. A reading below 50 indicates that more builders view conditions as poor than good.

The index tracking expectations for the coming six months dropped to 44, from 50 in March. The reading for current sales also fell three points, to 33. And respondents reported a small decline in buyer traffic, with a March reading of 27, from 28 the month before. The recent backsliding suggests some builders anticipated a spring rebound that isn't coming to fruition.