One Big Week for Economic News
For the so-called summer doldrums, this week has shaped up as a significant one for investors, policy makers, and other watchers of economic data. From both sides of the Atlantic a number of key economic events are scheduled over the next four days. The most critical for the U.S. are two days of meetings by the Federal Reserve’s rate-setting Federal Open Market Committee, which may signal further loosening to boost the U.S. recovery, and at the European Central Bank, which may clarify how it plans to save the euro zone. But plenty of other announcements crowd the economic calendar. By the coming weekend, we should know a lot more about the state of the world economy.
Tuesday, July 31
Personal income and outlays in the U.S. The consensus view of economists polled by Bloomberg News is a month-to-month gain of 0.4 percent. Higher income means higher consumption.
S&P Case-Shiller Index. This is one of the most important indexes of home sales, based on data from 20 cities. The consensus is the index will show a month-to-month gain of 0.5 percent, and a year-to-year contraction of 1.4 percent. Encouraging—but the index also shows just how deep the U.S. real estate hole remains.
U.S. consumer confidence. This broad confidence measure from the Conference Board fell in June to 62, rattling markets. And the consensus for July is for even worse—61.5.
German employment and retail sales. Investors have been anxiously scanning the data to see if Germany will finally succumb to recession because of its neighbors’ woes. The Tuesday numbers might show what lies ahead.
Wednesday, Aug. 1
U.S. monthly auto sales. Unit sales rose slightly in June to an annual rate of just over 11 million. Economists are looking for them to come in little changed at an even 11 million.
Manufacturing. In the last update, released July 2, the Institute for Supply Management manufacturing index slipped below 50, a bad sign for manufacturing. Economists expect a modest uptick to 50.1.
FOMC announcement. The Federal Reserve will probably warn us on Wednesday of the dangers of the fiscal cliff. More important, the Fed may hint heavily at the policies it’s considering to give the feeble recovery some semblance of a backbone. One might be an indication that the low interest rate regime will last longer than originally envisioned. Investors will also be parsing every syllable for signs that a third round of quantitative easing is being considered.
Thursday, Aug. 2
U.S. jobless claims. The consensus is for 370,000 new jobless claims. The annual summer retooling of auto factories could affect the number. The four-week average of jobless claims is mildly encouraging.
ECB Council meeting. The head of the ECB, Mario Draghi, will issue a statement after the meeting. Since Draghi pledged last week that the ECB would do all in its power to save the euro, investors have bid up European stocks in hopes of a breakthrough. What’s likely is some agreement for the ECB to buy sovereign debt from Spain and Italy on the secondary market.
Friday, Aug. 3
U.S. payroll data. This monthly employment report has become the big kahuna of U.S. economic news. The Bloomberg News survey projects that the jobless rate for July will remain stuck at 8.2 percent, while payrolls will have expanded by 100,000, better than the June number but still subpar.