These two reports could be the true tell for the economy

Two key measures of inflation due out later this week — the Consumer Price Index and the Producer Price Index — are of particular concern to S&P Global portfolio manager Erin Gibbs.

In a new interview on CNBC's "Trading Nation," Gibbs said in light of last week's wage growth that missed economists' estimates, she will be watching the "inflation indices" closely.

"These are big numbers to watch after the meager wage growth last week," Gibbs said Monday.

"Overall, the unemployment report was great. There were very good unemployment numbers, but the one thing that was really concerning was flat wage growth. So now we need to see if there is inflation anywhere within the U.S. economy that meets the Fed's 2 percent inflation target," she said.

The Producer Price Index, measuring the change in prices for goods and services from the perspective of producers (rather than consumers), is due out Thursday before the market opens. Economists are forecasting 1.9 percent growth year over year and an unchanged figure month over month, per FactSet data.

The Consumer Price Index, which measures the change in price of a fixed sample of goods and services purchased by consumers nationally, is due out Friday before the opening bell. Economists are forecasting 1.7 percent growth year over year and 0.10 percent growth month over month, per FactSet data.

"We expect both of these indices to be higher," Gibbs said. "Both of them have been in the upward trend, hitting new highs for the past several months, and we want to see that trend continue. If there's a downturn and they come in lower than expected, that would raise some real concerns about the U.S. economy."

Furthermore, disappointing readings for these reports could signal the Federal Reserve delays raising its federal funds target rate until later in the year, she added.

In a note to clients Monday, Rhino Trading Partners chief strategist Michael Block wrote that he is keeping an eye on CPI growth coming up.

The expectation for 1.7 percent year-over-year growth is "not good enough for me," Block wrote, "or for the Fed to do anything drastic other than blame the weakness on 'idiosyncratic' factors."

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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