With all the chatter around what the Federal Reserve is going to do in the coming weeks regarding slowing QE3, economic data has moved back to the front burner for the markets. Is bad news again going to be treated positively by Wall Street as it could mean that tapering won’t start in September as many economists believe? Well, that question may be being answered in early Monday trading after a Commerce Department report showed that durable goods orders fell more than expected in July. With the soft report, the major indices are holding slightly in positive territory. The Dallas Fed Manufacturing Survey is on tap at 10:30 AM EDT to give a little more color to the state of factories in the U.S.
This week will feature many reports that cover the full breadth of the nation’s economy. Although several of those reports often aren’t considered “market moving,” they likely will garner some extra attention as investors try to gauge moves of the Fed. This will include the aforementioned report from the Dallas Federal Reserve today, the S&P/Case-Shiller Home Price Index and Consumer Confidence report on Tuesday; Pending Home Sales on Wednesday; the Chicago Purchasing Managers’ Index and the Reuters/University of Michigan Consumer Sentiment Index on Friday.
Reports that are generally held in high regard this week, include the already announced report on durable goods as well as:
Gross Domestic Product for the Second Quarter – The Commerce Department’s revisions upon more complete data put GDP for the first quarter showing a tepid annualized gain of 1.1 percent after an original estimation of 1.8-percent improvement. GDP increased at an annual rate of 1.7 percent in the second quarter (that is, from the first quarter to the second quarter), reflecting positive contributions from personal consumption expenditures, exports and residential investment, which helped offset negative pressures in less government spending and increased imports. With more data, economists are expecting to see GDP for the second quarter revised upward to show growth of 2.3 percent in the second quarter.
Initial Jobless Claims for the Week Ended August 24 – Last week, first time filings for jobless benefits rose more than expected. The Labor Department reported that initial jobless claims increased to 336,000 from a revised 323,000 the week prior (revised from 320,000). The week ending August 10 had been the lowest number of new weekly claims since October 2007. The four-week moving average was lowered by 2,250 to 330,500. Generally speaking, economists consider claims under the 350,000 as showing moderate growth in the labor markets. For the latest week, economists are expecting claims to nip down to 330,000.
Personal Income and Outlays for July – Last month, the Commerce Department said that personal income improved by 0.3 percent in June, following a 0.4 percent increase in May. As Americans made more, they also spent more, with personal outlays increasing 0.5 percent for the month, after a 0.2 percent gain in May. With the extra spending, personal savings declined by 0.2 percent in June. Headline inflation was up by 0.4 percent and core inflation rose 0.2 percent during the month. For July, economists are expecting personal income to rise 0.2 percent and spending to increase by 0.3 percent. The core PCE index is expected to climb 0.2 percent.