I expect inflation fears and hopes to move back to the top of the Wall Street agenda. The Bureau of Labor Statistics will release the Consumer Price Index inflation report for April on Tuesday, May 13 before the New York market opens. Economists surveyed by Bloomberg are projecting that core inflation–that is the rate of inflation excluding more volatile energy and food prices–rose 0.3% in April. In March, core consumer prices inched up just 0.1%.
That would be negative news since the April price data will not show the full effect of the Trump Tariffs announced on April 2. A pickup in core inflation might well delay interest rate cuts from theFederal Reserve.
We’ll get other important economic news this week. On Thursday retail sales numbers to show almost no growth after a healthy 1.5% jump at the end of the first quarter. The drop in growth is expected because consumers pulled forward purchases such as cars in order to beat tariff hikes.
Recent surveys of manufacturers and service providers show rising input costs that may lead to an increase in future inflation rates. The government’s April producer price index, also due for release on Thursday, will shed light on wholesale cost pressures.
