This coming week is jam packed with market moving indicators. On the inflation front,we will get updates on producer and consumer price inflation. Marquee indicators on consumer spending,manufacturing and housing show up with reports on retail sales,industrial production and housing starts. Believe it or not,the FOMC minutes play second fiddle this week.

Monday

The U.S. Treasury monthly budget report showed a massive deficit in May of $189.7 billion versus a year-ago May deficit of $165.9 billion. The deficit recently has been boosted by purchases of federal housing agency debt and outlays related to TARP. Year-to-date receipts were down 18 percent with year-to-date outlays up 19 percent. Looking ahead,the month of June typically shows a moderate surplus for the month. Over the past 10 years,the average surplus for the month of June has been $33.3 billion and $22.1 billion over the past 5 years.

Treasury Statement Consensus Forecast for June 09: -$97.0 billion

Range: -$100.0 billion to -$75.0 billion.

Tuesday

The producer price index inflation rate eased to a 0.2 percent gain,after rising 0.3 percent in April. Behind the slowing was a 1.6 percent drop in food prices after a 1.5 percent surge in April. Meanwhile,energy actually rebounded 2.9 percent. The core PPI rate posted a 0.1 percent decrease in May,following a 0.1 percent uptick the month before. June will likely see a boost in the headline number on higher energy costs.

PPI Consensus Forecast for June 09: +0.8 percent

Range: +0.1 to +1.2 percent

PPI ex food & energy Consensus Forecast for June 09: +0.1 percent

Range: -0.2 to +0.7 percent

Retail sales in May were quite good at the headline level but after wading through the detail,the May gain was merely respectable. Overall retail sales rebounded 0.5 percent after falling 0.2 percent in April. Excluding motor vehicles,retail sales also made a comeback,gaining 0.5 percent,also following a 0.2 percent drop in April. However,a 3.6 percent jump in gasoline station sales was the primary factor behind the increase. Excluding motor vehicles and gasoline,retail sales edged up 0.1 percent after slipping 0.1 percent in April. Looking ahead,early indications from chain store sales are that retail sales are likely to be weak in June. Also,unit new motor vehicle sales declined slightly. However,the gasoline portion of retail sales is likely to be strongoil prices in June jumped about $6 per barrel (roughly 11 percent) on a seasonally adjusted basis but contract oil prices will almost certainly dampen the increase.

Retail sales Consensus Forecast for June 09: +0.5 percent

Range: +0.1 to +1.0 percent

Retail sales excluding motor vehicles Consensus Forecast for June 09: +0.6 percent

Range: +0.2 to +1.5 percent

Business inventories fell a sharp 1.1 percent in April as businesses pared stockroom shelves much faster than the 0.3 percent dip in business sales. Looking ahead,we are likely to see another decline in business inventories. Preliminary numbers show a 0.6 percent decline in manufacturers’ inventories for May and a 1.4 percent drop in wholesale inventories.

Business inventories Consensus Forecast for May 09: -0.8 percent

Range: -1.2 to -0.7 percent

Wednesday

The consumer price index edged up 0.1 percent in May after no change the month before. Keeping the headline CPI soft was a 0.2 percent decline in food prices that helped to offset a 0.2 percent gain in energy costs. But looking ahead,a rise in gasoline prices will likely bump up the headline CPI temporarily for June.

CPI Consensus Forecast for June 09: +0.7 percent

Range: +0.3 to +0.8 percent

CPI ex food & energy Consensus Forecast for June 09: +0.1 percent

Range: 0.0 to +0.2 percent

The Empire State manufacturing index fell back in June to minus 9.41 from minus 4.55 the month before. Looking ahead to July,the June new orders index suggests that there may be little change in the overall index. New orders,which point to future production and shipments,were roughly unchanged at minus 8.15 from minus 9.01 in May.

Empire State Manufacturing Survey Consensus Forecast for July 09: -4.5

Range: -10.0 to 7.0

Industrial production in May dropped 1.1 percent,following a 0.7 percent fall in April. However,the manufacturing component was not quite as negative,falling 1.0 percent after declining 0.6 percent the prior month. For the other major nonmanufacturing components,utilities in May fell 1.4 percent while mining output decreased 2.1 percent. Overall capacity utilization in May fell further to another new record low,dropping to 68.3 percent from 69.0 percent in April. Looking ahead,early indicators of manufacturing have been mixed. Production worker hours in manufacturing fell 1.2 percent in June,according to the latest employment report. Manufacturing surveys pointed in different directions for the month as the ISM rose closer to breakeven as did the Philly Fed Business Outlook Index. However,the Empire State index slipped further back into negative territory.

Industrial production Consensus Forecast for June 09: -0.7 percent

Range: -1.0 to -0.5 percent

Capacity utilization Consensus Forecast for June 09: 67.8 percent

Range: 67.5 to 67.9 percent

The Minutes of the June 23-24 FOMC meeting are scheduled for release at 2:00 p.m. ET. On their own,the minutes should be relatively tame since the Fed has been in a holding pattern on interest rates since December’s cut in the fed funds target to near zero. Also,the Fed has largely clarified that it intends to keep substantial amounts of liquidity in the financial markets though quantitative easing—by purchasing longer-term Treasuries,agency debt,and other securities. But markets have become uncertain about green shoots taking hold and any addition nuance in the minutes on the Fed’s view of the economy could push equities and bonds sharply in either direction.

Thursday

Initial jobless claims in the July 4 week fell a very steep 52,000 to 565,000 the lowest level since the beginning of the year. However,the latest number benefitted from coming off auto layoffs and other layoffs in the manufacturing sector that had already happened. But continuing claims for the June 27 week jumped 159,000 to a new high of 6.883 million. Net,the most important factor is that new claims are coming down,pointing to eventual easing in continuing claims.

Jobless Claims Consensus Forecast for 7/11/09: 535,000

Range: 500,000 to 580,000

The general business conditions component of the Philadelphia Fed's business outlook survey index jumped to minus 2.2 from minus 22.6 in May. This was the highest level since plus 1.9 seen this past September. Looking ahead,the June improvement could continue into July—the new orders index improved substantially to a mere minus 4.8 from minus 25.9 in May.

Philadelphia Fed survey Consensus Forecast for July 09: -5.0

Range: -7.0 to 2.5

Friday

Housing starts rebounded in May 17.2 percent,following a sharp 12.9 percent drop the month before. The comeback was led by the multifamily component which posted a 61.7 percent gain after falling 49.4 percent in April. Nonetheless,the single-family component gained 7.5 percent,following a 3.3 percent rise the month before. Don’t look for much improvement in June,however,as supply of single-family homes is still quite high and apartment vacancy rates have been rising.

Housing starts Consensus Forecast for June 09: 0.530 million-unit rate

Range: 0.500 million to 0.550 million-unit rate

Econoday Senior Writer Mark Pender contributed to this article.

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