Producer Price Index Expected to Rise 0.1%

Earnings season starts in full this week, and although second-quarter reports will capture much attention, Wall Street also will be scrutinizing economic data, including a preliminary inflation indicator: the producer price index.

The PPI, coming Thursday, is expected to be flat in June from a decline of 0.4% the month before. Excluding volatile energy and food prices, the index is expected to rise 0.1%, according to economists.

Retail sales data for June also will be scanned for signs consumer spending is remaining resilient.

Consumers returned to automobile dealerships and malls last month, government statistics are likely to show Friday, proof that households are continuing to prop up the U.S. economic recovery.

Vehicle sales by General Motors Corp. and other auto makers are believed to have risen last month as bigger cash discounts lured more consumers. Shoppers looking to stretch their buying power probably boosted sales at discounters such as Wal-Mart Stores Inc. Prices for goods at the wholesale level probably didn’t rise in June for a third straight month, making it easier for consumers to keep spending.

Retail sales rose by 0.7% in June, the Commerce Department is expected to report. That would follow a 0.9% drop in May, which was the biggest decline in six months, caused by a slump in auto sales after car makers reduced incentives.

Excluding autos, the government’s retail report will show a 0.5% increase in June sales, reversing the previous month’s 0.4% drop, economists expect.

Other economic reports this week:

* Today, the Federal Reserve will report on consumer debt for May.

* Wednesday, the Labor Department will report on prices of imported goods for June. The Commerce Department will report on wholesale inventories in May.

Reuters, Bloomberg News