The May 27 week is shortened in the US by the Memorial Day observance on Monday. Reports normally released on Monday will be moved to Tuesday, and some Tuesday data to Wednesday. There isn’t a lot of market-moving potential in the week’s economic data calendar.

The most looked at data will probably be the PCE deflator for April in the report on personal income and spending at 8:30 ET on Friday. Although the uptick in March for the year-over-year change (PCE deflator up 2.7 percent, core PCE deflator up 2.8 percent) could well be reversed in the April report, it is far too soon to project that disinflation has resumed in a way that will encourage Fed policymakers to lower rates sooner than their hawkish signals would suggest. Chair Jerome Powell has discussed the “sideways” performance of the inflation indicators in the first quarter. It will probably need reports for the full second quarter before the FOMC has greater confidence that inflation is sustainably moving back to the Fed’s 2 percent objective.

The second estimate of first quarter GDP is widely anticipated to be revised lower from the 1.6 percent growth in the advance report when the numbers are released at 8:30 ET on Thursday. The revision should hold few surprises. In any case, the second quarter is now 2/3 gone and more recent data available to assess economic conditions. The three Fed District Bank GDP Nowcasts are telling somewhat divergent stories, but on the whole it would seem that the available numbers put growth in the second quarter at about 2 percent – modest, but healthy.

The Fed’s Beige Book at 14:00 ET on Wednesday will provide anecdotal evidence about the US economy for the period of early April through mid-May. The prior Beige Book showed conditions across the 12 District Banks as the strongest in nearly two years. The report will indicate if further progress has been made, but even a very similar tone would point to economic stability and mild expansion for most of the US.

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