Wholesale price data to offer clues on inflation

The stock market appears to be regaining its health after a weak first quarter, but a full recovery may be far off if data suggest inflation is a growing concern for the Federal Reserve.

Investors will probably react today to the stronger-than-expected jobs report from the Labor Department on Friday, a stock market holiday. The data showed nonfarm payrolls rose 180,000, higher than the expected 135,000. The unemployment rate fell to 4.4%, a five-month low.

Bond prices, which move in the opposite direction from yields, fell sharply in a holiday-shortened session Friday on the prospects that the economy was healthier than some believed.

The employment figures underscore the idea that the economy was cooling but not hurtling toward recession. In addition to the jobs report, data have shown consumer spending climbing, existing-home sales holding up and slow expansion in manufacturing and services.

Still, investors fear high inflation could prevent the Fed from lowering interest rates this year or even prompt a rate hike.

The Labor Department’s producer price index, which measures the cost of wholesale goods, will offer clues about the pace of inflation.

The March index is expected to come in at 0.6% on Friday, after rising 1.3% in February. Analysts forecast that the core index, which strips out food and energy prices, rose 0.2% in March, after advancing 0.4% in February.

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The week ahead

Today

* Treasury bill auction

Wednesday

* Treasury reports on federal budget for March

* Quarterly earnings reports due from Genentech and Research in Motion.

Thursday

* The nation’s largest retailers announce March sales.

* Labor Department reports on weekly jobless claims.

* Freddie Mac reports on mortgage rates.

Friday

* G-7 finance ministers meet in Washington.

* Labor Department reports on March producer price index.