The Week Ahead
INSTALLMENT CREDIT Monday, Oct. 7, 3 p.m.EDT -- Consumers likely borrowed $7.5 billion in new debt in August, says the median forecast of economists surveyed by MMS International, one of The McGraw-Hill Companies. Installment credit increased by a large $7.7 billion in July, led by auto financing and revolving credit, which includes credit cards. Economists have begun to point to high debt levels and repayment problems as reasons for a second-half slowdown in consumer spending. The delinquency rate on credit cards is increasing, and personal bankruptcies are on track to total a record of more than one million this year. Moreover, interest and principal payments on existing installment debt rose to a high of 11.1% of disposable income in the second quarter, according to the Federal Reserve. RETAIL SALES Friday, Oct. 11, 8:30 a.m.EDT -- The MMS median forecast expects that retail sales increased by a solid 0.4% in August. Sales edged up by 0.2% in August and just 0.1% in July. Economists expect that purchases of motor vehicles rose last month after little gain in July and August. Excluding cars, store purchases probably increased 0.3% after advancing 0.2% in August. That's indicated by weekly surveys of department and chain stores sales. Also, the unexpected jumps in housing starts and new-home sales suggest that purchases at building supply and furniture stores did well. PRODUCER PRICE INDEX Friday, Oct. 11, 8:30 a.m.EDT -- Producer prices of finished goods likely increased 0.2% in September, says the MMS survey. However, rising oil and food prices could lift the increase a bit higher. Excluding the energy and food sectors, core prices probably grew 0.2% last month. In August, overall prices advanced 0.3%, while the core index fell 0.1%. Wholesale inflation remains quite low, especially further back in the production process. Core prices of intermediate supplies and raw materials in August were lower than they were a year earlier.
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