Weekly Economic Calendar October 29 – November 2, 2007

Monday, 10/29
No Data

Tuesday, 10/30
August S&P Case Shiller 20-City Home Price
Consensus Prior
YoY -4.2% -3.9%

October Consumer Confidence
Consensus Prior
99.4 99.8
Has fallen 12.2 points over past two months as credit conditions tightened and housing deteriorated
Recent stock market weakness also likely to negatively impact optimism
Expected to hover around lowest levels since hurricane Katrina in 2005
Final October Univ of Michigan weaker than expected

Wednesday, 10/31
October ADP Employment Change
Consensus Prior
60k 58k
Assume additional 20k for government jobs to equal non-farm figure

3rd Qtr Real GDP (Inflation Adjusted and Annualized)
Consensus Prior
3.1% 3.8%
Wider range of estimates than I normally see, some as high as 4%
Strong export demand helping offset weak housing market
Exports likely growing 2-3x faster than imports
Government and consumer consumption expected to grow
Business investment expected to slow to half of last quarter’s 11% pace

3rd Qtr Personal Consumption
Consensus Prior
3.1% 1.4%
Personal consumption likely to be robust, but residential construction expenditures likely to decline by another 15%

3rd Qtr Price Index
Consensus Prior
2% 2.6%
Because imports subtract from GDP, the 10% surge in import prices actually helps lower GDP prices
The gross domestic purchases deflator is expected to be higher at 2.1%

3rd Qtr Core PCE
Consensus Prior
1.6% 1.4%
Core inflation expected to fall to a 3.5 year low of 1.8% YoY, which is below the Fed’s forecast range for this year

3rd Qtr Employment Cost Index
Consensus Prior
+.9% +.9%
3rd qtr +1.1% average hourly earnings growth fastest pace in over a year
Benefits costs no longer declining
Wages and benefits each rising around 3.4% YoY

October Chicago Purchasing Manager
Consensus Prior
53 54.2
Risk of higher number as export and agricultural demand remains strong for construction machinery even as domestic residential market cools

September Construction Spending
Consensus Prior
-0.5% 0.2%
Non-residential no longer able to fully offset depressed housing demand

FOMC Meeting
Fed is in a tough spot. No cut would disappoint equity markets but leave room for a bigger cut later (if needed) and reduce expectations of automatic Fed bail-outs while helping support the weak dollar. A 50bp cut might indicate panic (recession fears). So, the consensus 25bp cut to 4.5% looks most likely, but there are a lot of supporters of the other two outcomes.
Everyone looking for a cut in the discount rate to “address financial plumbing risks”

Thursday, 11/1
Initial Jobless Claims
Consensus Prior
325k 331k
Continuing Jobless Claims
Prior
2530k

September Personal Income
Consensus Prior
0.4% 0.3%
Aggregate weekly payrolls increased in September
Average hourly earnings rose +.4%

September Personal Spending
Consensus Prior
0.4% 0.6%
Solid growth in non-auto spending expected
Savings rate expected to hold steady at .7%

September PCE Deflator
Prior
YoY 1.8%
Core PCE
Consensus Prior
MoM 0.2% 0.1%
YoY 1.8% 1.8%
Core PCE expected to increase slightly less than core CPI because of smaller weighting of owners equivalent rent in PCE
Medical costs expected to rise more slowly

October ISM Manufacturing
Consensus Prior
51.5 52
Prices Paid
Consensus Prior
63 59
Most regional surveys weakened
Watch new orders and export orders to gauge demand
Higher oil prices likely to feed through to higher prices paid

October Total Vehicle Sales
Consensus Prior
16M 16.2M
Domestic
Consensus Prior
12.3M 12.5M
Total auto sales weakened this year, ranging between 16.6M per month in January to 15.3M in July

Friday, 11/2
October Change in Non-Farm Payrolls
Consensus Prior
85k 110k
Manufacturing Change
Consensus Prior
-10k -18k
Three month average monthly growth 97k, 6m at 112k, and 12m at 136k
Housing market weakness hurting growth in construction, durable goods, and finance, which may accelerate employment losses in these sectors
State data indicates September’s figure may be revised lower

October Unemployment Rate
Consensus Prior
4.7% 4.7%
Unemployment rate has been steadily rising from 4.5% in June and 4.6% in July to 4.7% in September
Risk of continued rise to 4.8% as initial claims rise (historically a .3% gain in the unemployment rate has been a recession indicator)

October Average Hourly Earnings
Consensus Prior
MoM 0.3% 0.4%
Prior
YoY 4.1%
September grew an above trend +.4% MoM due to increases in transportation, warehousing and professional services which are not expected to continue
Annual growth should fall back to 4% versus Dec 2006 peak of 4.3%

October Average Weekly Hours
Consensus Prior
33.8 33.8

September Factory Orders
Consensus Prior
0.2% -3.3%
Durable goods orders fell -1.7% due to a 39% drop in defense purchases
Risk is toward a weaker number than expected for factory orders too