ISM Manufacturing Index (July, Monday 10:00 ET)
F: 46.4 C: 46.5 P: 44.8
The ISM manufacturing index is expected to remain below the benchmark of 50, but will continue on its seven month upward trend in July. These results would indicate that the manufacturing industry is still contracting in the face of feeble demand, but at a slower pace. Nevertheless, the index is expected to come in over 41.2 for the third month in a row. Since data persistently above this benchmark indicates economic expansion, these results would be consistent with our baseline scenario of recovery in late 2009.
Personal Income and Outlays (June, Tuesday 8:30 ET)
F: -1.0%, 0.3% C: -1.0%, 0.3% P: 1.4%, 0.3%
After a two month upward adjustment due to increases in social benefits under the American Recovery and Reinvestment Act, personal income is expected to drop 1% in June. As the economy and job market remain weak, companies continue to implement unpaid furloughs, reduced work weeks and other measures that effectively reduce employee compensations. Nevertheless, consumption is forecasted to increase modestly due to the increase in income in the previous months and prospects of additional stabilization in the economy.
Pending Home Sales (June, Tuesday 10:00 ET)
F: 0.7% C: 0.6% P: 0.1%
Amid renewed demand for existing homes due to favorable home prices and increasing affordability, pending home sales are expected to increase for the fifth consecutive month. An increase would indicate that sales of existing homes would rise further in the upcoming months, which could, in turn, further slow the decline in home prices and decrease inventory levels.
Non-Farm Payrolls (July, Friday 8:30 ET)
F: -395K C: -325K P: -467K
Amid ongoing weakness in the job market, non-farm payrolls are expected to drop for the eighteenth month in a row. The shrinking job market could present risks to economic recovery by limiting consumer spending even further. On a positive note, the worst declines are behind us with the change in non-farm payrolls hitting a peak of -741K in January 2009 and slowing considerably since. In July, average initial unemployment insurance claims have fallen from those reported in June, as have continuing claims. These results indicate that the contraction in the job market has slowed further over the past month and nonfarm payroll figures are expected to reflect this improvement by exhibiting a smaller negative change than in June.
Consumer Credit (June, Friday 3:00 ET)
F: -$4.7B C: -$4.2B P: -$3.23B
Consumer credit outstanding is expected to drop for the eighth time in nine months as consumers reign in their spending, change their preference to cash over credit and pay-off existing debt. In addition, the most recent Beige Book indicated that lenders are continuing to tighten lending standards, making it more difficult for consumers to access the credit markets. The steep drop outstanding credit could slow the recovery of consumption as the use of credit expands the pool of money that people have available to spend.
