US ECON: Data on Tap - CPI, Real Earnings, Leaders, FOMC Mins

[Consumer Prices (Jan)] IFR sees no change in the all-items CPI between December and January but a 0.2% increase in the core rate. Despite a 0.4% monthly increase in December, CPI was still below its August 2006 peak. Core CPI growth had been very benign in the four quarter and the 3-month annualized rate fell to 1.5%, its lowest in 16 months. Non-energy services CPI continues to be threatening to the overall inflation outlook but this category too is moving back toward the Fed's comfort zone.

In January, look for decreases in costs for transportation (vehicles and fuel) to offset small gains food and beverages, housing and medical care.

Note. Effective with the release of the January 2007 CPI, the Bureau of Labor Statistics will display CPI index values to three decimal places. Percent changes will be computed based upon the three decimal place indexes but percent changes will continue to be rounded to one decimal place.

[Leading Indicators (Jan)] IFR sees a 0.1% rise in January's index of leading economic indicators. The drop in average workweek hours and building permits should push the index down. However, the rise in Michigan's consumer confidence index and lower jobless claims should leave the total index slightly positive. Among other contributing gains will be the M2 money supply and higher stock prices.

Growth in the leading index has been flat for the past several months but the coincident indicator continues to advance Growth in the leading index has been flat for the past several months but the coincident indicator continues to advance.

[FOMC Minutes (Jan 30-31)] The steady stream of Fed speakers over the past week or so has had more bearing over monetary policy expectations than will the minutes of the last FOMC meeting. At that, the Committee's last statement was boilerplate and noncommittal while officials on the lecture circuit have been hawkish. There are still four weeks remaining until the March 20-21 FOMC meeting but the market is confident that no policy change is due next month.