Vital Signs: Will Inflation Keep Easing?

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MEETINGS OF NOTE

Thursday, May 17, 8:30 a.m. EDT - Former Federal Reserve Chairman Alan Greenspan speaks at the Atlanta Journal Constitution's Best of Business 2007 breakfast in Atlanta.

9:15 a.m. EDT - Federal Reserve Bank of Chicago President Michael Moskow makes opening remarks at the Chicago Fed's conference on bank structure and competition entitled "Mixing of Banking and Commerce" in Chicago.

9:30 a.m. EDT - Federal Reserve Board Chairman Ben Bernanke gives the keynote address at the Chicago Fed's conference on bank structure and competition entitled "Mixing of Banking and Commerce."

JOBLESS CLAIMS - Thursday, May 17, 8:30 a.m. EDT

Jobless claims for the week ended May 5 hit a 16-week low of 297,000. In the prior week, claims stood at 306,000. The four-week moving average eased to 317,250, from 328,750 in the week ended Apr. 28. Continuing jobless claims for the week ended Apr. 28 rose to 2.56 million, from 2.49 million.

LEADING INDICATORS - Thursday, May 17, 10 a.m. EDT

The Conference Board's composite index of leading economic indicators probably held steady in April. The March index inched up 0.1%, after a 0.6% drop in February. The March reading was boosted by a longer workweek among factory workers, lower weekly initial claims, an increase in the money supply, and a small increase in building permits. Still, the index fell 0.8% from a year ago in March, marking the third straight yearly decline.

The April reading will get some support from rising stock prices. However, a shorter workweek for factory workers, lower consumer expectations, and higher initial claims will weigh on the April index.

PHILADELPHIA FED SURVEY - Thursday, May 17, 12 p.m. EDT

The Philadelphia Federal Reserve Bank's factory activity index for the mid-Atlantic region is expected to improve in May. The index held at a paltry level of 0.2 for a second straight month in April, after falling to 0.6 in February, from 8.3 in January.

The news was mixed among the other indexes. More respondents reported an increase in new orders, while fewer said backlogs of orders fell. Those are both positive for future activity. At the same time, the shipments index weakened and the prices paid index jumped. Higher prices paid for inputs are likely a reflection of rising gasoline and other energy costs.

Manufacturers in the region did feel a little better about the coming six months. The general business activity index rose to 25.8, from 17.4. There were higher hopes for shipments. The inventory index at -0.6, from -9.8 in March, may be a sign that any inventory overhang is just about worked off.

CONSUMER SENTIMENT INDEX - Friday, May 18, 10 a.m. EDT

The advanced Reuters/University of Michigan consumer sentiment index for May probably ticked up a little. The final April index eased to 87.1, from 88.4 in March, and 91.3 in February.

Most of the decline in the past two months is coming from a dimmer view of future prospects. The consumer expectations index dropped to 75.9 in April, from 81.5 in February. The April current conditions index was 104.6, from 106.7 in February. The leading factor in driving confidence lower is higher gasoline prices.

While consumers also felt less optimistic about economic prospects over the coming year, they did feel a bit better about their current finances, perhaps driven by a surging stock market.

Mehring is economics writer for BusinessWeek.