A Preview of the US Economy for the Week: CPI and Retail Sales are Key

This week, the US economic calendar is dense, with the April CPI report on Tuesday and the retail sales data on Thursday being the market's focus. Below is Goldman Sachs' daily breakdown and forecast of key events for this week, all times in Eastern Time.

Monday (May 11) | Pay attention whether existing home sales can confirm a rebound in the real estate market

The April existing home sales will be released at 10:00 am, with Goldman Sachs estimating a monthly growth of 3.0%, higher than the market consensus of 2.0%, and the previous value of -3.6%. If the data materializes, it will be a clear signal of a rebound in the real estate market after last month's contraction.

Tuesday (May 12) | The most important day of the week, CPI faces technical disturbances

The April CPI will be released at 8:30 am. Goldman Sachs estimates an overall CPI increase of 0.58% month-on-month, and an annual rise from 3.26% to 3.68%; Core CPI is expected to rise 0.31% month-on-month, and an annual increase to 2.67%, both in line with market consensus.

The main driver of the overall data is energy, with an expected rise of 4.6% month-on-month, and food prices up by 0.3%. In the core components, one technical disturbance to watch is housing inflation, which is expected to be significantly high, with owner-equivalent rent expected to rise 0.50% month-on-month and rental prices up 0.44%. This is due to the government shutdown last year, which missed data collection, and the sample group that should have been completed last October was delayed to this April, and compared with prices from 12 months ago, equivalent to incorporating a two-month increase at once. This jump is a technical correction and does not represent a sudden worsening of real rental pressure. Auto insurance will still rise by 0.4%, and the tariff-pushing effect on specific categories is weakening, expected to contribute only 0.04 percentage points. Based on the above predictions, the April core PCE is expected to grow by 0.26% month-on-month.

In terms of Fed officials, Chicago Federal Reserve Chairman Goolsbee will speak at 1:00 pm. Last week, he stated that if inflation continues to stall, the optimistic space for interest rate cuts will be reduced, and he publicly expressed skepticism about the value of forward guidance in FOMC statements. New York Federal Reserve Chairman Williams will attend the monetary policy discussion co-hosted by the Swiss National Bank and the IMF in Zurich at 3:15 am, where he stated last week that the current policy stance has "balanced the risks very well," with neutral wording.

Wednesday (May 13) | PPI core reading may significantly exceed expectations, with a chorus of hawkish officials

The April PPI will be released at 8:30 am. The core PPI is expected to rise by 0.5% month-on-month, significantly higher than the market consensus of 0.3% and the previous value of 0.1%, suggesting continued accumulation of upstream inflationary pressures.

For the Fed officials, Boston Federal Reserve Chairman Collins will speak at 11:30 am. She clearly stated last week that "it is very important to strongly consider raising interest rates under certain circumstances," and is one of the most hawkish voices among recent officials. Voting member Kashkari will speak at 1:15 pm, and he stated last week, "We must not allow high inflation to become the new normal," and opposed issuing a rate cut signal in the statement.

Thursday (May 14) | Retail data may weaken overall, with seven Fed officials speaking on the same day

The April retail sales will be released at 8:30 am. Overall growth of 0.2% month-on-month is expected, far below the market consensus of 0.6%; core retail is expected to grow by 0.2%, below the consensus of 0.4%. This weakness reflects mixed signals from alternative data and seasonal headwinds, with last month's strong retail performance (overall +1.7%) having a certain front-end consumption effect, and this month's decline is naturally a correction. On the same day, the number of initial jobless claims is expected to be 205,000, slightly higher than the previous value of 200,000; the consensus forecast for import prices is +1.0%.

For the