5 Things to Watch on the Economic Calendar

The U.S. workweek starts a day late as businesses close for Memorial Day. The shortened week is still long on data. We will get a second look at the first quarter and new readings on home demand and consumer optimism. Here is what’s important.

#1: GDP Revisions Will Sport a Minus Sign

A month ago, the Commerce Department said real gross domestic product grew at a small 0.2% annual rate in the first quarter. Monthly data out since then have economists thinking the economy instead shrank. Specifically, winter weather hurt home building and the West Coast port slowdown skewed trade flows between the U.S. and Asia. Commerce releases its second swipe at the winter quarter Friday. Economists surveyed by The Wall Street Journal expect revisions will show real GDP contracted at a 1.0% pace. That would be the weakest performance since the first quarter of 2014.

#2: Two More Looks at Housing Demand

Next week brings information on demand for new and existing homes. Economists expect the reports to show strength during the important spring selling season, although sales of existing homes were weak in April. The Commerce Department reports on April new-home sales Tuesday. Economists think sales bounced back in April after plunging 11.4% in March. Thursday, the National Association of Realtors releases its pending home sales index. The index tallies up contracts signed but not yet closed to buy an existing home. The index has risen for three consecutive months. Economists are banking on another gain in April.

#3: Higher Gasoline Prices May Flatten Consumers’ Spirits

Two surveys out next week gauge how consumers view the economy. No surprise, consumer optimism as measured by the Conference Board’s confidence index and the University of Michigan’s sentiment index increased as gasoline prices fell. Now that pump prices are rising again, both the confidence and sentiment indexes have fallen. Economists think the May numbers on the confidence index, out Tuesday, and the sentiment index, out Friday, will be little changed, given that gas prices have risen further.

#4: Energy Slump Still Hurting Capital Spending

When it comes to equipment spending, businesses remain tight-fisted. New orders for nondefense capital goods excluding aircraft have fallen in four of the last six months. Much of the weakness reflects cutbacks in capital spending undertaken by energy companies grappling with falling oil prices. But the oil slump is falling back on companies that supply materials and equipment to the oil patch, and those businesses are now hurting as well. The April numbers on capital spending will be included in Commerce’s durable goods report, released Tuesday. Economists who forecast the capex category expect a small gain in April, but not enough to make up for the losses of the previous half year.

#5: Fed Speakers

Fed Vice Chairman Stanley Fischer is set to speak Tuesday, and a few regional Fed bank presidents are also scheduled to clip on the microphone. Economy-watchers will be listening for mentions of data-dependency driving future Fed decisions. The speakers include: Loretta Mester (Cleveland), Jeffrey Lacker (Richmond), John Williams (San Francisco) and Narayana Kocherlakota (Minneapolis).