It's 'show me' time for the economy, after April's monthly retail sales signaled the consumer is still alive and doing pretty well.
Consumer price index inflation data tops the list of economic reports in the week ahead, and is expected to show a year-over-year gain of 2.1 percent. The number is the next metric for Fed watchers, since inflation, as measured by the Fed's favored Personal Consumption Expenditures inflation gauge, continues to lag behind the Fed's target. Rising inflation would be a catalyst to push the Fed toward raising interest rates.
"It looks to me like the CPI is going to be a little hotter. There is a warming trend going on. It's going to be a little bit of a pickup year over year," said Diane Swonk, CEO of DS Economics. She said import prices are picking up and there have been increases in wages that should show up. Prescription drug prices and health-care services are also moving higher.