What to Expect in the Week Ahead (COST, MU, NKE Earnings; Inflation Data)

A handful of major corporate earnings reports, inflation data, and other economic statistics will be this week's highlights.

The economic-data highlight of the week will be the personal-consumption expenditures price index for August on Friday, from the Bureau of Labor Statistics. The core PCE, which excludes food and energy components and is the Federal Reserve's preferred inflation gauge, is expected to be up 3.9% from a year ago.

Other data to watch this week will include the Conference Board's Consumer Confidence Index for September on Tuesday, the Census Bureau's durable goods report for August on Wednesday, and the Bureau of Economic Analysis' third and final estimate of second-quarter gross domestic product growth on Thursday.

The Federal Reserve Bank of Chicago releases its National Activity Index for August. The index is designed to gauge overall economic activity.

The Census Bureau reports new residential sales data for August. Economists forecast a seasonally adjusted annual rate of 698,000 new single-family homes sold, 16,000 fewer than in July.

The Conference Board releases its Consumer Confidence Index for September. Expectations are for a 106 reading, slightly less than in August.

The Census Bureau releases the durable goods report for August. Economists forecast that new orders for durable manufactured goods will decline 0.5% month over month, after a 5.2% plunge in July. That was the first drop since February, and the steepest decrease since the early days of the pandemic in April 2020.

The Bureau of Economic Analysis releases its third and final estimate of gross domestic product growth for the second quarter. The consensus call is for GDP to have grown at a seasonally adjusted annual rate of 2.3%, two-tenths of a percentage point more than the BEA's second estimate released in late August.

The National Association of Realtors releases its Pending Home Sales Index, a leading indicator of housing activity.

The Bureau of Labor Statistics releases the personal-consumption expenditures price index for August. Consensus estimate is for the PCE to increase 3.4% year over year, following a 3.3% gain in July. The core PCE, which excludes volatile food and energy prices, is expected to rise 3.9%, three-tenths of a percentage point less than previously. The core PCE is 1.2 percentage points below its postpandemic peak from February 2022, but still far too high for the Federal Reserve, which stressed that interest rates would likely remain higher for longer at the FOMC meeting this past week.

The Institute for Supply Management releases its Chicago Business Barometer for September. Expectations are for a 47.0 reading, 1.7 points less than in August. The index has been below the expansionary level of 50 for 12 consecutive months.