Tracking the Economy: Week's Economic Reports Are Expected To Be Softer, Bolstering Fed's Position
NEW YORK -- Now that the Federal Reserve seems to have eased its credit clamp based on the belief the economy has slowed, we will soon see whether the latest figures agree.</br></br>Generally, expectations call for an easing in many of this week's May economic reports, including retail sales, industrial production and capacity utilization. But the consumer price index outlook is disturbing in light of last Friday's unexpected 0.9% surge in May producer prices.</br></br>Nonetheless, the consensus view calls for another impressive month of progress on the trade deficit after March's $1 billion decline, although economists have issued warnings to watch out for revisions.</br></br>Combined with April's weak employment report the forthcoming data "pretty much paint a weak picture" if on target, said Stuart G. Hoffman, senior economist at PNC Financial Corp., Pittsburgh.</br></br>That should be comforting news to the Fed, which eased credit last week after a year of tightening. The agency seems to be acting on the conviction that it has throttled the economy and sidestepped troublesome inflation. "Now," said Mr. Hoffman, "we wait for them to do it again."