With millions of stimulus checks going out to taxpayers, Wall Street wants to know where that money will be spent -- and this week's data could help investors gauge the mind-set of the average consumer.
Tax rebates historically have been helpful in boosting the economy, but they really work only if they're used to buy goods and services. With many consumers weighed down by debt and saving up to keep up with the cost of basic necessities, some market experts are concerned that what's best for most individuals -- saving their rebates -- might not end up helping the broader economy.
Whether the average consumer feels financially healthy could determine whether the economy gets that late-2008 lift that so many investors have been betting on.
On Tuesday, the Commerce Department reports on retail sales in April. Economists surveyed by Thomson Financial/IFR estimated, on average, that sales slipped 0.1% last month after growing 0.2% in March.
After seeing last week's batch of mixed April sales figures from individual retailers, Wall Street knows that spending remains weak, but investors want more information. Retailers have made clear that consumers are changing their habits to accommodate the rising cost of energy and food, but no one knows how long these conditions will last.
Investors will learn more about inflation when the Labor Department releases its consumer price index on Wednesday. The index is expected to have risen by 0.3% in April after increasing by a similar amount in March. Core prices, which strip out food and energy, are expected to have climbed by 0.2% after rising at the same pace the previous month.
Last week the Dow Jones industrial average sank 2.4%, the Standard & Poor's dropped 1.8% and the Nasdaq composite index slid 1.3%.