Week Ahead: Economic Indicators (12th May – 16th May) – US

Tuesday 13th May
08:30 ET
US CPI for April
The Consumer Price Index, published monthly by the US Bureau of Labor Statistics, measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
It serves as a key indicator of inflation, reflecting the purchasing power of the dollar and influencing economic policy decisions.

In March 2025, the CPI rose by 2.3% year-over-year, down from 2.7% in February, indicating a cooling in inflationary pressures.
The core CPI, which excludes volatile food and energy prices, decreased to 2.6%, suggesting easing underlying inflation. Despite this moderation, consumer spending increased by 0.7%, driven by a surge in automobile purchases ahead of a new 25% tariff on car imports enacted on April 3.
Spending on restaurants and hotels also rebounded, reflecting continued consumer activity despite declining confidence.
What to Expect
US Stocks
Lower inflation can boost investor confidence, as it may signal a more stable economic environment and reduce the likelihood of aggressive monetary tightening. However, sectors sensitive to consumer spending and trade policies should be monitored closely.
US Dollar
Lower inflation may lead to expectations of a more dovish Fed, potentially weakening the US dollar. However, the impact of tariffs and trade policies could introduce volatility in currency markets.
US Government Bonds
Easing inflation typically supports bond prices, leading to lower yields. Investors may anticipate that the Fed will maintain or even lower interest rates in response to the cooling inflation, making bonds more attractive.
Federal Reserve Policy
The cooling inflation figures may reduce immediate pressure on the Federal Reserve to raise interest rates. However, the recent implementation of new tariffs could lead to future inflationary pressures, complicating the Fed’s policy decisions.

Wednesday 14th May
10:30 ET
US Weekly EIA Crude Oil Inventories
The US Weekly EIA Crude Oil Inventories report, normally released every Wednesday by the Energy Information Administration, details the amount of crude oil held in storage across the United States.
It provides insights into the supply and demand dynamics of the oil market.
What to Expect
An increase in inventories suggests higher supply or lower demand, potentially leading to lower oil prices. Conversely, a decrease indicates lower supply or higher demand, which can drive prices up.

Thursday 15th May
08:30 ET
US PPI for April
The Producer Price Index, published monthly by the US Bureau of Labor Statistics (BLS), measures the average change over time in the selling prices received by domestic producers for their output.
It serves as a leading indicator of consumer inflation, as changes in producer prices often pass through to consumers.

In March 2025, the PPI for final demand decreased by 0.4% month-over-month, marking the first decline in nearly 18 months. This drop was primarily driven by a 0.9% decrease in goods prices, notably an 11.1% fall in gasoline prices, and a 0.2% decline in services prices.
On a year-over-year basis, the PPI rose 2.7%, down from a 3.2% increase in February.
Despite the overall decline, certain categories saw price increases. Prices for steel mill products surged by 7.1%, reflecting early impacts of newly imposed tariffs. Additionally, prices for processed materials excluding foods and energy rose by 0.9%.
What to Expect
US Stocks
Sectors sensitive to input costs, such as manufacturing and transportation, may benefit from lower producer prices. However, companies reliant on imported materials might face margin pressures due to tariffs, leading to mixed reactions in equity markets.
US Dollar
Lower producer prices might weaken the dollar in the short term due to reduced inflation expectations. However, the potential for tariff-induced inflation could offset this effect, leading to increased volatility in currency markets.
US Government Bonds
Easing producer prices could bolster demand for government bonds, pushing yields lower as investors anticipate a less aggressive monetary tightening path.
Federal Reserve Policy
The unexpected decline in producer prices may ease immediate inflationary pressures, potentially influencing the Federal Reserve’s monetary policy stance. However, the recent implementation of substantial tariffs could lead to future cost-push inflation, complicating the Fed’s decision-making process.

US Retail Sales for April
The US Retail Sales report, published monthly by the US Census Bureau, measures the total receipts of retail stores, encompassing both goods and food services.
It’s a key indicator of consumer spending, which accounts for a significant portion of overall economic activity.
The report provides insights into consumer demand trends and helps gauge the health of the economy.

In March 2025, US retail and food services sales increased by 1.4% from the previous month, reaching $734.9 billion, and were up 4.6% compared to March 2024. This marks the strongest monthly gain since January 2023. The surge was largely driven by a 5.3% increase in motor vehicle and parts sales, as consumers accelerated purchases ahead of impending auto tariffs. Excluding autos, retail sales rose by 0.5%.
Other notable increases were seen in building materials and equipment stores (+3.3%), sporting goods and hobby stores (+2.4%), and electronics and appliance stores (+0.8%). Conversely, sales at gasoline stations declined by 2.5%, reflecting lower fuel prices.
What to Expect
US Stocks
The robust retail sales figures suggest strong consumer spending, which could bolster investor confidence and support equity markets, particularly in the retail and consumer discretionary sectors.
US Dollar
Stronger consumer spending may lead to expectations of continued economic growth, potentially supporting the US dollar. However, concerns over the sustainability of this spending, especially if driven by pre-tariff purchases, could temper this effect.
US Government Bonds
Positive retail sales data might lead investors to anticipate tighter monetary policy, potentially resulting in higher yields and lower bond prices. However, if the surge in spending is viewed as temporary, bond markets may remain relatively stable.
Federal Reserve Policy
While the uptick in retail sales indicates strong consumer demand, the Federal Reserve is likely to consider whether this is a short-term response to impending tariffs or a sign of sustained economic strength. If inflationary pressures remain subdued, the Fed may maintain its current policy stance.

09:45 ET
US Industrial Production for April
The Industrial Production report, published monthly by the Federal Reserve, measures the real output of the nation’s factories, mines, and utilities.
It’s an indicator of the manufacturing sector’s health and overall economic activity.
The report also includes capacity utilization, which reflects the percentage of resources being used by manufacturers, miners, and utilities.

In March 2025, industrial production decreased by 0.3% month-over-month, primarily due to a significant 5.8% drop in utility output, attributed to unseasonably warm weather reducing energy demand.
Despite this, manufacturing output, which constitutes approximately 75% of total industrial production, rose by 0.3%, marking the fifth consecutive monthly increase.
Notably, the automotive sector saw a 1.2% rise in production.
Mining output also edged up by 0.6%.
Overall, industrial production was 1.3% higher compared to the same month last year. Capacity utilization for the industrial sector slightly decreased to 77.8%, remaining below its long-run average of 79.6%.
What to Expect
US Stocks
The modest increase in manufacturing output may provide some support to industrial and manufacturing stocks. However, broader market sentiment could be tempered by concerns over declining utility output and potential impacts of trade policies on future production.
US Dollar
The mixed industrial production data is unlikely to significantly influence the US dollar. However, sustained growth in manufacturing could bolster the dollar if it leads to stronger economic performance.
US Government Bonds
The decline in overall industrial production may lead investors to seek the safety of government bonds, potentially causing yields to dip slightly. However, the continued growth in manufacturing could offset some of this demand.
Federal Reserve Policy
The Federal Reserve is likely to view the decline in industrial production as a temporary setback due to weather-related factors affecting utility output. The continued growth in manufacturing suggests underlying economic strength, which may keep the Fed on its current policy path unless broader economic indicators suggest a need for adjustment.

Friday 16th May
08:30 ET
US Housing Starts for April
The Housing Starts report, released monthly by the US Census Bureau and the Department of Housing and Urban Development, measures the number of new residential construction projects initiated during the month.
It serves as an indicator of the health of the housing market and the broader economy, reflecting builder confidence and consumer demand.

In March 2025, housing starts declined by 11.4% month-over-month to a seasonally adjusted annual rate of 1.324 million units, falling short of the expected 1.42 million units. This marks the largest monthly drop in a year and the lowest level in four months. Single-family housing starts fell by 14.2% to 940,000 units, the lowest since July 2024, while multi-family starts decreased by 3.5% to 384,000 units. Despite the monthly decline, total housing starts were 1.9% higher compared to March 2024.
What to Expect
US Stocks
The significant decline in housing starts may exert downward pressure on homebuilder stocks and related sectors. Investors might interpret the data as a sign of weakening demand in the housing market, potentially leading to cautious sentiment in the broader equity market.
US Dollar
The softer housing data could lead to a modest depreciation of the US dollar, as it may signal a slowdown in economic growth. However, the impact might be limited if other economic indicators remain robust.
US Government Bonds
Treasury yields may decline in response to the weaker housing starts, as investors seek the safety of government bonds amid concerns about the housing market’s health. Lower yields reflect expectations of slower economic growth and potential adjustments in monetary policy.
Federal Reserve Policy
While the decline in housing starts indicates a cooling in the housing sector, the Federal Reserve is likely to consider this data alongside other economic indicators. Unless the slowdown in housing significantly affects broader economic activity or inflation expectations, the Fed may maintain its current policy stance.

10:00 ET
University of Michigan Sentiment Survey May Prelim
The University of Michigan Consumer Sentiment Survey is a monthly report that gauges consumer confidence in the US economy.
It assesses individuals’ attitudes toward current economic conditions and their expectations for the future.
The survey also measures inflation expectations over the short and long term, providing insights into consumer perceptions of price stability.

In April 2025, the final reading of the Consumer Sentiment Index declined to 52.2, down from up from the 50.8 in the April prelim report.
This represents an 8.4% month-over-month decrease and a 32.4% year-over-year decline.
The drop from March (57.2) reflects growing concerns about inflation, rising unemployment, and economic policy uncertainty.
Notably, the Index of Consumer Expectations fell to 47.3, a 10.1% decrease from March, indicating heightened pessimism about future economic conditions.
What to Expect
US Stocks
The sharp decline in consumer sentiment may lead to increased market volatility, particularly affecting sectors reliant on consumer spending. Investors might interpret the data as a sign of weakening demand in the housing market, potentially leading to cautious sentiment in the broader equity market.
US Dollar
Elevated inflation expectations could bolster the US dollar in the short term, as markets anticipate potential interest rate hikes to combat inflation. However, concerns over economic growth may offset this effect.
US Government Bonds
Rising inflation expectations may put upward pressure on bond yields, as investors demand higher returns to offset anticipated inflation. However, if economic growth slows, demand for safer assets like government bonds could increase, potentially lowering yields.
Federal Reserve Policy
The combination of declining consumer sentiment and rising inflation expectations presents a challenge for the Federal Reserve. While the Fed aims to control inflation, it must also consider the potential impact of tightening monetary policy on consumer confidence and economic growth. The data may prompt the Fed to reassess its policy stance in upcoming meetings.