Two big questions about the U.S. economy will be answered this week.
The first is just how deeply the economy contracted in the first quarter.
The second revision of gross domestic product from the Bureau of Economic Analysis put growth at negative 1 percent for the quarter. Analysts now expect the third and final revision to show that the economy shrunk at a negative 2 percent annualized rate.
Both private-sector and government economists expect growth to accelerate in the coming quarters, based on other indicators like inflation and job growth. Goldman Sachs, for instance, projects growth picking up to near 4 percent in the second quarter. Nevertheless, a steeply negative first quarter would mean, as a matter of arithmetic, that growth for the year is likely to disappoint.
The second question is whether the slight housing market rebound in April was real and a sign that the sector will continue to recover and contribute to growth in the months ahead.
On Monday, the National Association of Realtors will report on existing home sales for May. Home sales totaled 5.4 million last July, but came crashing down after the Federal Reserve began the "taper" of its mortgage-backed securities and mortgage rates began rising.
Sales bottomed out at 4.6 million in March before ticking up to 4.65 million in April. Analysts expect a further improvement for May.
On Tuesday, there will be three other new data points for housing: Home prices for April, from the Federal Housing Finance Agency and the S&P/Case-Shiller housing index, and sales of new homes. All three are expected to show increases.
One number to watch in particular is the inventory of new houses for sale. Rising inventories would be an indication of a broader housing recovery, with rising sales volume and moderate price increases in the months ahead.
One other item to watch this week: On Thursday, the Bureau of Economic Analysis will release May data on personal income and spending. That report will include the personal consumption expenditures price index, which is the price index that officials at the Federal Reserve watch most closely.
Other measures of inflation, such as the widely referenced Consumer Price Index, show that inflation pushed past 2 percent in May. Two percent is also the Fed's target. But PCE inflation has been running lower — at 1.6 percent in April, and only 1.4 percent excluding volatile energy and food costs. If PCE inflation also picks up toward 2 percent, it would solidify the perception that a real trend toward rising inflation has taken hold.