(Updates with release of CPI report)

June 12 (Reuters) -

The U.S.

Federal Reserve

is expected to hold its benchmark overnight interest rate

steady in the 5.25%-5.50% range at the conclusion of its latest

two-day policy meeting on Wednesday.

Policymakers remain uncertain about the timing of a first

rate cut and say they want to see more data confirming that

inflation will fall, even if slowly.

Among the key statistics they are watching:

INFLATION (CPI released June 12; next release PCE June 28):

Consumer prices were flat in April, the first unchanged

month in nearly two years and a further respite from a surprise

jump in prices earlier this year. The headline consumer price

index rose at a 3.3% annual pace versus 3.4% in March, while the

rate was 3.4% in April after excluding food and energy compared

to 3.6% "core" inflation in the prior month.

The lower-than-expected inflation for the month could

begin rebuilding confidence among Fed officials that price

pressures are easing.

The separate personal consumption expenditures price index

had risen 2.7% in April, matching the rise in March. Core

prices, stripped of volatile food and energy costs, rose 2.8%,

also the same as the month before.

The Fed uses the PCE index to set its inflation target, and

the April report kept alive the concern mentioned by some

policymakers that inflation may get lodged at a rate too far

above target to ignore.

But there was some glimmer of progress. The core PCE index

rose 0.2% on a month-to-month basis in April versus 0.3% in the

prior month, beating analysts' expectations. There were also

signs of slowing demand, with real spending and real disposable

personal income both dropping slightly, a possible precursor to

a further easing of price pressures.

EMPLOYMENT (Released June 7; next release July 5):

U.S. firms added a higher-than-expected 272,000 jobs in May,

a solid beat over what economists expected that will likely add

to sentiment among Fed officials that there is no rush to cut

interest rates given the strength of hiring.

The unemployment rate rose slightly to 4%, the highest level

in more than two years. Average job growth in recent months

remains above 240,000.

Fed officials have become more comfortable with the idea

that continued strong job growth could still allow inflation to

fall, especially if the supply of labor keeps growing and wage

growth eases.

Neither happened in May. The number of people in a job or

looking for work fell, while average hourly wages rose 4.1%

compared to a year ago. The Fed generally considers wage growth

in the range of 3.0%-3.5% as consistent with its 2% inflation

target.

JOB OPENINGS (Released June 4; next release July 2):

In a sign of the job market's continued return to normal,

the level of job openings declined again in April and pushed the

number of open jobs available for each unemployed person down to

1.24, the lowest level since June of 2021. It is now effectively

back to where it was in the years before the COVID-19 pandemic.

Fed Chair Jerome Powell has kept a close eye on the U.S.

Labor Department's Job Openings and Labor Turnover Survey

(JOLTS) for information on the imbalance between labor supply

and demand, and the pandemic-era jump to more than 2 to 1 in the

number of open jobs for each available worker was emblematic of

the time.

Things have cooled substantially. Other aspects of the

survey, like the quits rate, also have edged back to

pre-pandemic levels in what Fed officials view as a balance

between supply and demand emerging in the labor market overall.

RETAIL SALES (Released May 15; next release June 18):

Consumer spending flatlined in April, and downward revisions

to earlier data pointed to the sort of slowing demand Fed

officials have said may be needed to finish their inflation

fight.

The unchanged retail sales reading for April was reported

after unexpectedly strong spending led Fed officials to counsel

patience before any rate cuts, and argue that the full impact of

prior rate hikes had not yet had its full effect on the economy.