Indicators out this week offer baseline for Trump presidency
Smokestacks, job creation and changes in consumer prices will be top of mind for investors this week – especially as a new presidential administration is set to take office.
Key economic indicators regarding industrial production, employment and inflation will be released starting on Tuesday.
These measures in many ways will be the starting-point benchmarks for President-elect Donald Trump as investors gauge the success of Trumponomics years down the road.
Some of the indicators investors will be watching, include:
* The Empire State Survey. This is the first economic indicator, due out on Tuesday. The index measures the business outlook of manufacturers in New York State, and is used as a general forecast of business activity. The measure posted a big jump in December indicating business confidence. But investors should mute expectations for this week's reading, according to economists at brokerage firm Nomura, suggesting "hard data on real economic activity were mixed." Nomura expects the reading to "decline slightly" in the January update.
* Industrial production. Evidence that manufacturing output improved in December is piling up and a Wednesday reading on industrial production will offer proof of how the month went. Oil production ticked higher during December along with vehicle and parts production. Boosting U.S. manufacturing has been a major focus of the incoming president. Nomura estimates the December reading on industrial production will show a 0.6% increase.
* Consumer Price Index. Inflation is expected to be a tepid 0.3% in the upcoming reading due Wednesday, but there could be much more volatility beyond the headline number. Price changes in food are seen as modest, but higher inflation is expected in energy prices. Inflation trends will affect how the Federal Reserve adjusts monetary policy and interest rates as President-elect Trump takes a more aggressive stance with government spending.
* Initial jobless claims. Trump has been aggressively applauding companies that say they will add U.S. jobs. Thursday, investors will see where the economy was in terms of joblessness at the end of President Obama's term. Recent jobless claims data show that the market for workers is healthy and layoffs have been "subdued," Nomura says. Jobless claims have been trending lower in recent readings. But the Nomura economists warn investors from reading too much into the December number since holiday statistics can be distorted during the holiday month.
Investors, though, this week will have a yardstick with which to measure the success of Donald Trump as president.