Vital Signs: How Bad Is the Damage to the Economy?

On deck: retail sales, producer and consumer price indexes, business inventories, industrial production, housing starts, consumer sentiment, Bernanke speaks, and earnings reports

As investors await nascent signs that Washington’s massive and paradigm-shattering policy response to the financial crisis is working, they realize a great deal of damage to economies in the U.S. and around the world has already been done. In the coming weeks, the economic data will begin to show just how much. Several reports for September, due this week, will provide some early clues for the U.S., but the sharp credit tightening didn’t begin until mid-September, so its full impact will not begin to show up until the October reports.

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