HIGHLIGHTS Outlook of US economic indicators to be released in the coming week

WASHINGTON (Thomson Financial) - The following is a synopsis of US economic indicators to be released in the coming week, with forecasts compiled by Thomson's IFR Markets.
The coming week will be light with economic data compared to this past week. Among the most closely-watched numbers will be the ISM non-manufacturing index and the international trade deficit. Also in the week, there will be speeches by Federal Reserve Chairman Ben Bernanke, Fed Governor Randall S. Kroszner, and Kansas City Fed President Thomas Hoening.
MONDAY, MAY 5
The week will begin with the release of the Institute of Supply Management's non-manufacturing index, which in April is expected to have dipped to 49.3 from 49.6.
"In general, the economy is weakening and so you'd expect this number to remain below fifty and drop lower," said Jay Bryson of Wachovia. A level of 50 is considered the contraction/expansion threshold.
WEDNESDAY, MAY 7
Preliminary productivity in the first quarter is expected to have decreased to a 1.7 pct annual rate, below the 1.9 pct rate in the previous quarter.
Bryson pointed out that when the economy is in a downturn, output decreases, but because companies are slow to lay off workers, productivity ultimately increases.
"We're not looking for a huge decline in productivity, and it could keep unit labor costs relatively under control," he said. Preliminary unit labor costs are expected to have increased by 2.6 pct in the first quarter, the same rate of change as in the previous quarter.
Pending home sales in March are expected to have dropped to 83.8 from 84.6 in the previous month.
"Consumer sentiment plunged in March to the lowest level since the 1980 recession, suggesting growing concern about future financial prospects and the state of the economy," said economists from Lehman Brothers. "This should discourage new home purchases," they added.
Consumer credit is expected to have increased to 6.0 bln usd in March, up from 5.2 bln usd in the previous month. Economists say much of the credit will be in the form of credit cards.
Joel Naroff of Naroff Economic Advisors says consumer credit is hard to predict. "On one side consumers are pressured to spend less. On the other side, they may be forced to put expenses on credit card." Lately, credit cards are being used for every day expenses, like food and gasoline, which have increased in price, he said.
THURSDAY, MAY 8
Initial jobless claims are expected to have increased to 370,000 in the week ending May 3rd. This past week, claims increased 35,000 to 380,000.
Meanwhile, continuing claims are expected to have totaled 3.000 mln in the week ending April 26, above the previous week's four-year high of 3.019 mln.
Economists expect that wholesalers increased their inventories in March by just 0.5 pct, well below the 1.1 pct accumulation rate in the previous month.
"We believe that some unnecessary inventory building has occurred in the wholesale sector, forcing firms to cut production and liquidate stocks," said economists from Lehman Brothers. "However, a rise in commodity prices during the month is likely to boost the nominal value of wholesale stocks, offsetting some of this contraction and leaving overall wholesale inventory growth positive."
Wholesale sales are expected to have recovered in March, increasing 0.7 pct compared to a 0.8 pct decline in the previous month.