May's personal income will be released on Friday. It is likely to be the week's most important economic indicator. It should show that consumers' incomes continue to grow, while inflation is still moderating. We know that our Earned Income Proxy for private wages and salaries in personal income rose to a record high in May (chart).
We also expect to see that receipts of unearned income rose to a record high in May (chart).
May's PCED will be released along with personal income on Friday. It was up 4.4% in April (chart). Both May's CPI and PPI for consumption suggest it continued to fall in May. That should be greeted favorably by the stock and bond markets.
