January 28 –February 1, 2008
Consensus Prior
Monday, 1/28
December New Home Sales 645k 647k
Following last months -9% MoM
plummet, December expected to ease by only -.3% MoM
Single-family building permits
fell -10% in December
Inventories surged to 9.3 months
in November, back near 25 year high
Median sales prices expected to
continue sinking
Tuesday, 1/29
December Durable Goods Orders +1.8% -0.1%
Ex-Transportation -0.1% -0.8%
Expected
to jump higher due to a surge in aircraft orders (287 vs 177)
Slight
rebound expected in machinery and tech orders
Overall
trend is lower, as shown by negative growth ex-transportation
Manufacturing ISM slipped below 50
in December, also a sign of slowing growth
November Case-Shiller 20-City Home Price
Change YoY -7.1% -6.1%
October’s monthly decline of -1.4%
MoM was the largest monthly decline in at least 20 years
January Consumer Confidence 87 88.6
Expected
to sink to lowest level since 2003
Current
conditions index has fallen steadily for past five months
Surprisingly,
Univ of Michigan future expectations rose slightly in Jan
Employment factors will be key,
especially with unemployment popping up +.3%, to 5%, in December
FOMC Meeting Begins
Wednesday, 1/30
ADP Employment Change 40k 40k
Assume
additional 20-25k for government job growth
In
line with consensus payroll growth expectations of +55k
4th Qtr Real GDP (Inflation
Adjusted) Annualized +1.2% +4.9%
First
estimate, not all data available yet
Sharp
slowdown expected versus the third quarter
Residential
construction and inventory growth remain a drag on growth
Government
spending and exports provide support
4th Qtr Personal Consumption Annualized +2.8% +2.8%
Expected
to show solid growth
4th Qtr GDP Price Index Annualized +2.6% +1%
Inflation
expected to have accelerated in the fourth quarter
Higher import
prices show up as a negative rather than a positive
Construction
prices falling (Lumber down 30% since last summer)
4th Qtr Core PCE Annualized +2.4% +2%
For
all of 2007, expected to rise at least 2% YoY
FOMC Meeting Ends
Fed Target Rate 3.25% 3.5%
Still
good chance of a 50bp cut
New voting members being rotated
in for the year at this meeting are generally viewed as being more hawkish
Thursday, 1/31
December Personal Income +0.4% +0.4%
Aggregate
hours worked softened, but average hourly earnings rose +.4%
December Personal Spending +0.1% +1.1%
Sharp
slowdown expected as retail sales were soft
Gasoline
prices declined and vehicle sales were flat
December PCE Deflator YoY +3.5% +3.6%
Core PCE MoM +0.2% +0.2%
YoY +2.2% +2.2%
Inflation
measures expected to hold steady in December
Initial Jobless Claims 320k 301k
Continuing Claims 2672k
Four
week average of initial claims is 314.75k
Not clear if decline to 301k area
in last two weeks is real or due to faulty seasonals
4th Qtr Employment Cost Index +0.8% +0.8%
Continued
steady growth at trend pace of last six quarters expected
Wage
and salary expected to rise an unchanged +.8% MoM
Benefits
growth expected to accelerate slightly to +.9% MoM
January Chicago Purchasing Manager Index 53 56.4
Correlation
with national ISM has weakened over past two years
Chicago
strength expected to weaken toward national decline
December Help Wanted Index 20 21
Friday, 2/1
January Change in Non-Farm Payrolls 55k 18k
Change Manufacturing -20k -31k
18k December job growth was smallest
monthly increase in over 4 years Last month’s new job creation was actually
negative in private sector
Declines
in initial jobless claims suggest few layoffs in January
Retail data may be more impacted
than normal by seasonals as fewer than normal holiday jobs were created last
year
Manufacturing, finance, and
information (writers strike) job growth is expected to be soft
Recent strength has been in
government, healthcare, and professional services employment
Note -Includes annual benchmark
revisions. Tax data indicates payroll
growth will be revised down by about 300k.
Census data will also update population controls for the household
survey which impacts the unemployment rate.
Updated data goes through March 2007.
Birth/death estimates also are updated.
January Unemployment Rate 5% 5%
Very unusual jump of +.3% MoM last
month leaves room for some give back this month. May see rate slide back down to 4.9%
Unemployed receiving jobless
benefits has risen recently to 2%, vs 1.9% over previous two years, supporting
higher unemployment rate continuing
January Average Hourly Earnings MoM +0.3% +0.4%
Expected
to ease back from above trend growth of prior two months
Annual
growth slowed to +3.7% YoY in 2007 from +4.3% YoY in 2006
January Average Workweek Hours 33.8 33.8
January Manufacturing ISM 47.3 47.7
Prices Paid 68 68
Last month’s reading fell over 3
points, from 50.8 to 47.7, indicating the economy has begun contracting as
credit conditions tighten
Regional surveys weakening, with Philly
Fed collapsing 19 points in January
Lower
oil prices may help prices paid to ease
Index
needs to fall to 42 or 43 to indicate recession
ISM adjusting weights of various
subcomponents, but general indicator shouldn’t change much
January Final U of Michigan Confidence 79 80.5
Preliminary
January reading rebounded a surprisingly strong 5 points
Stock market swoon this week, and
increased calls of a recession, likely reduced sentiment
Inflation expectations expected to
hold steady
December Construction Spending -0.5% +0.1%
Private
residential construction continues to slow
Non-residential and public
construction no longer offsetting all of the decline in homebuilding
January Total Vehicle Sales 16M 16.3M
Domestic Manufacturers 12.3M 12.5M
