Inflation Threat Looms As Economy Shows Slowing Signs: Benzinga's Main Street Monitor

Last week’s economic data release confirmed a slowdown and the market reacted negatively to the bad news this time around.

Slowdown Is For Real: Multiple job market data came in softer than expected, with the Labor Department's "Job Openings and Labor Turnover Survey" throwing in particularly disappointing results. Job openings dropped below the 10-million mark in February for the first time in about two years.

The March non-farm payroll report released on Friday showed that the economy added 236,000 jobs, and more importantly, the January and February numbers were revised down by a net 17,000 jobs. The annual rate of the average hourly earnings fell from 4.6% to 4.2%, confirming the thawing in inflationary pressure.

Business surveys showed anemic activity, with the Institute for Supply Management's manufacturing purchasing managers' index falling to a three-year low.

Now, here's a look at the key economic data scheduled for the unfolding week:

Duo Of Pricing Readings: The recent soft economic data and the banking crisis are widely expected to play in the minds of the Fed officials when they sit around to deliberate on the Fed funds rate at the May 2-3 meeting.

What can decisively sway the central bank toward a potential pause could be evidence of a continued letup in inflationary pressure.

The Bureau of Labor Statistics will release its March consumer price inflation data at 8:30 a.m. EDT on Wednesday. The expectations for key readings from the report are as follows:

CPI Consensus Vs. February Numbers

Change	CPI	Core CPI
M-o-M	0.3% (0.4%)	0.4% (0.5%)
Y-o-Y	5.2% (6.0%)	5.6% (5.5%)

BLS would release the producer or wholesale price inflation report at 8:30 a.m. EDT on Thursday.

PPI Consensus Vs. February Numbers

Change	PPI	Core PPI
M-o-M	0.1% (-0.1%)	0.2% (0%)
Y-o-Y	3.1% (4.6%)	3.3% (4.4%)

The Cleveland Fed is scheduled to release its regional consumer price index for March at 11 a.m. EDT on Wednesday.

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FOMC Minutes & Fed Speeches:

The Fed will release the minutes of the March 21-22 meeting of the Federal Open Market Committee at 2 p.m. EDT on Wednesday. Despite the onset of the banking crisis, the monetary policy-setting arm of the central bank decided to raise the fed funds rate by 25 basis points to 4.75%-5% at the meeting.

The post-meeting policy statement released after the meeting showed a tweak that provided scope for a potential pause but Fed Chairman Jerome Powell reiterated the central bank's resolve to fight inflation at the post-meeting press briefing.

The minutes could shed more details on the thinking that went into the decision to and the committee members' views on inflation and interest rate outlook.

More clarity on the rate outlook come could from a slew of Fed speeches scheduled for the week.

• New York Fed President John Williams, an FOMC member: Monday (4:15 p.m. EDT)
• Philadelphia Fed President Patrick Harker, also an FOMC member: Tuesday ( 4 p.m. EDT)
• Minneapolis Fed President Neel Kashkari, an FOMC member: Tuesday (7:30 p.m. EDT)
• Fed Governor Christopher Waller: Friday (8:45 a.m. EDT)

Other Key Data:

The Commerce Department will release the retail sales report for March at 8:30 a.m. EDT on Friday. The consensus estimate calls for a 0.4% month-over-month drop in retail sales, the same pace of drop as seen in February.

The Fed is due to release its industrial production report for March at 9:15 a.m. EDT On a month-over-month basis, industrial production may have increased by 0.2%, slower than the 0.3% growth in February. Economists expect a 0.1% monthly decline in manufacturing output.

The University of Michigan's preliminary consumer sentiment report for April is scheduled for release at 10 a.m. EDT on Friday. Economists, on average, expect the headline consumer sentiment index to edge up from 62 in March to 62.7 in April. Investors may also focus on the inflation expectations readings from the report.

The Labor Department's weekly jobless claims report due at 8:30 a.m. EDT on Thursday is expected to show 205,000 people filing for first-time unemployment benefits in the week ended April 8, down from 228,000 in the previous week.

Treasury Auctions:

• Three-month and six-month bill auction: Monday (11:30 a.m. EDT)
• Three-year note auction: Tuesday (1 p.m. EDT)
• 10-year note auction: Wednesday (1 p.m. EDT)
• Four-week and eight-week bill auctions: Thursday (11: 30 a.m. EDT)
• 30-year bond auction: Thursday (1 p.m. EDT)

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