Retail Sales
Wall Street expects overall sales to slip 0.1%, after a 0.6% rise in December, amid soft auto sales. However, sales should rise 0.2% excluding autos and 0.3% minus autos and gas, according to Econoday.
Retail sales data is subject to large revisions. Plus, spending on goods only makes up about one-third of consumer makes up only about one-third of consumer outlays. We'll get a fuller picture from the personal income and outlays report on Feb. 29, which also will include the core PCE price index, the Fed's primary inflation gauge.
Jobless Claims
Initial claims for unemployment benefits are seen edging up 1,000 to 219,000 for the week through Feb. 10. That's still very low, but the very recent trend has been up, with the four-week average rising 3,750 last week to 212,250.
"The upturn in both the Challenger survey's measure of layoff announcements and the official state WARN notices of mass layoff and plant closures point to rising claims over the next few months," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote last week.
More Inflation Data On Friday
Friday's release of the producer price index also could have a big influence on the near-term path of the S&P 500 and interest rates. That's because some of the key inputs into the core PCE price index come from the PPI, most notably health care, which was one of the hottest parts of the CPI.
Lately, PPI health care inflation has been much softer than CPI health care data. That partly reflects CPI data on health insurance, which is a poor real-time measure. Also, CPI data is based on out-of-pocket spending, while PPI data includes employer and government reimbursements to medical providers.
Deutsche Bank economists noted this week that a 3.4% reduction in Medicare physician reimbursements could hold down health care inflation in January.
On the other hand, there's some risk that the PPI will show a big increase in portfolio management fees, which typically rise with stock prices but haven't kept up lately.