Economic data from the U.S. continues to remain somewhat busy during the week.

The main highlights will include the PPI, CPI and retail sales report for December. The data will likely give early glimpses into consumer spending and inflation for the month of December.

Weak Core inflation in November

In November, consumer prices had disappointed as core inflation showed little to no evidence of any price pressures building up.

It is not surprising that inflation continues to remain a puzzle to the Fed officials.

Still, the FOMC members remain optimistic and bank on the fact that the tighter labor market conditions could help to eventually push inflation higher.

Positive Inflation data from December?

The December inflation report is forecast to show that consumer prices increased just 0.2% during the month.

This is nearly half of the increase seen in November where headline CPI rose 0.4%. Core consumer prices, which strips the volatile food and energy prices is expected to rise 0.2%.

This shows a slight acceleration from the 0.1% increase registered in the previous month.

Retail sales report will be released simultaneously.

Economists forecast that headline retail sales rose 0.5% in December, which is slower than the 0.8% increase seen in November. Core retail sales are expected to also show a slow pace of increase of just 0.4% during the month.