The Week Aheadby
INSTALLMENT CREDIT Tuesday, Jan. 8
Consumers probably took on about $1.8 billion more in installment debt than they paid off in November, after their debt levels grew by $1.5 billion in October. In November, a gain in revolving credit--mainly credit cards--offset the continued downturn in auto loans. Auto financing has declined for seven months in a row, including an $800 million drop in October. Consumers, however, are relying heavily on credit cards. Revolving credit grew by $1.6 billion in October and is up some 14% from a year ago. Rising oil bills and higher taxes have taken large bites out of personal income since the summer. Households may be using credit cards to bridge the gap between income and spending.
INITIAL UNEMPLOYMENT CLAIMS Thursday, Jan. 10, 8:30 a.m.
New filings for state unemployment insurance benefits likely stood at an annual rate of about 450,000 for the week ended Dec. 29, the same recession-like level that has prevailed since late October. The high rate of jobless claims indicates that the U. S. unemployment rate should be running closer to 7%, rather than the 5.9% reported in November. Claims could be depressed by state office closings for Christmas or, in the following week, for New Year's Day. That would mean a sharp rebound in filings in mid-January.
PRODUCER PRICE INDEX Friday, Jan. 11, 8:30 a.m.
Producer prices for finished goods probably increased by 0.2% in December, the same modest gain as in November. Excluding food and energy, prices likely also rose by 0.2% last month, after a faster 0.5% advance in November. That gain, however, was due mostly to rising prices of cars and tobacco products. Oil costs likely remained subdued last month, after rising 0.1% in November. However, the jump in fuel prices from August to October will leave its mark on 1990 inflation. For the year, producer prices rose by 7%. But in the last half of 1990, wholesale inflation soared at an annual rate of more than 13%.