Week Ahead: A Ray of Light in the Beige Book?

A slow economic calendar next week will give investors a chance to digest all the bad news from this week.

The most significant piece of news will likely be the Federal Reserves report on its 12 district bank regions, known as the Beige Book, which is due on Wednesday.

Recent Beige Books have been cause for optimism as regional economies have shown pockets of strength. But pessimism abounds after a string of dismal reports this week on housing, manufacturing and labor.

A key housing report showed prices have fallen to their lowest level in nearly a decade with no end in sight, while a manufacturing report showed unexpected weakness in that sector. Manufacturing had been a lone consistent bright spot in an otherwise spotty U.S. recovery.

Then the hammer fell on Friday when a jobs report showed the U.S. added just 54,000 jobs and the unemployment rate jumped to 9.1% from 9%.

The Beige Book might give a clearer indication as to how those disappointing numbers break down across the U.S. The Midwest is predictably a trouble spot, having suffered devastating tornadoes and flooding in recent weeks.

The April report on international trade due Thursday will shed light on imports and exports for the second quarter 2011. Imports from Japan will certainly be down given the severe disruption to supply chains following the March earthquake and Tsunami.

Initial jobless claims for the week ended June 4 due Thursday are expected to remain at a high level.

The Import Price Index due Friday is expected to fall as fuel and food prices edged lower following sharp spikes earlier in the year.

Lastly, the monthly Treasury Statement for May due on Friday will show that the U.S. is running a deficit a deficit of $155 billion, up from $136 billion a year ago. Not much of a surprise there.