Week ahead: Progress expected on jobs, economic activity

This short holiday week is packed with meaningful economic data, offering a first glimpse at how the economy did in May.

Tuesday

The expansion at the nation's factories might have slowed a bit in May from its breakneck pace in April; the release of the Institute for Supply Management's index of activity will give the first read. Forecasters expect the index to come in at 59.4, down from 60.4, representing a continued strong expansion but not quite as fast.

Construction spending is expected to be unchanged in April from March.

Thursday

The ISM's survey on non-manufacturing businesses is to be released, and forecasters expect it to show some strengthening in the service industries it covers. Look for the index to come in at 55.9 for May, up from 55.4 in April

April factory orders are expected to have risen 1.3 percent, continuing the steady rise from March.

And in the first take on May retail sales, major chain stores are expected to report that sales rose 0.8 percent over a year earlier.

Friday

The biggest economic news of the week will likely be the jobs report on Friday, which should show gangbuster job growth in May. But the headline number for job creation -- a remarkable 500,000 net jobs are expected to have been gained -- will be heavily distorted by temporary hiring by the Census Bureau for its once-a-decade count of the population. Those jobs will disappear in the second half of the year.

So for a read on the underlying state of the job market, look to the change in private payrolls. They are expected to show solid job growth as well, with forecasters expecting a gain of 218,000 jobs, down a bit from the 231,000 private jobs added in April but still representing a labor market that is finally healing.

The unemployment rate will edge down to 9.8 percent, from 9.9 percent, analysts project.

-- Neil Irwin