US banking on retail sales rise

THE data watch will be in full swing this week as US investors pore over a flow of information from the American Government, hoping for some indication that the economy is picking up speed.

Retail sales figures released on Tuesday will be especially critical as investors are expecting some sign of life from consumers. April sales are expected to have risen by a healthy 0.7%, a big improvement over the 0.1% increase the previous month. A smaller rise will heighten fears that the economy is in danger of stalling after a first quarter that had a high growth rate.

On Wednesday, March business inventories are expected to show a 0.2% drop as businesses continue to reduce stocks. The consumer price index, the broadest measure of inflation, should not be much of a worry with the headline rate rising 0.4% during April but the important 'core' rate holding to a 0.2% gain over March.

There is almost no improvement expected in the industrial sector, with production thought to have risen at a weak 0.3% and the capacity utilisation rate remaining a substandard 75.5%.

On Friday, the Michigan-Sentiment index, the first gauge of consumer attitudes in the current month, is expected to hold steady at 93.0.

In earnings news, on Thursday investors will get the first look at the pillar of the hi-tech industry, personal computers, when the largest PC retailer Dell is expected to report quarterly earnings of 16 cents a share, down just a penny from the yearearlier period.

Data supplied by Thomson Global Markets.