S&P Case-Shiller 20 Home Price Index (August, Tuesday 9:00 ET)
F: -12.5% yoy C: -11.9% yoy P: -13.3% yoy
The ongoing improvement in sales of new and existing homes will cause home prices to stabilize further in August. As a result, the year-over-year decline is expected to slow for the fifth month in a row. The housing market remains weak and there is some uncertainty as to its future once the tax credit for first time buyers expires on November 30, nonetheless, home prices are expected to remain low but stable in the near future.
Consumer Confidence (October, Tuesday 10:00 ET)
F: 54.6 C: 53.5 P: 53.1
Consumer confidence is expected to rise modestly as more signs point to the beginning of economic recovery. Nevertheless, consumers are still suffering from a weak labor market, which will keep confidence levels subdued. Furthermore, the increase in confidence could translate into a modest rise for PCE, although demand is expected to remain low throughout the recovery.
Durable Goods Orders, Excl. Transportation (September, Wed 8:30ET)
F: 0.6%, 0.4% C: 1.0%, 0.8% P: -2.6%, -0.3%
The ISM Manufacturing Index reported that new orders rose in September, leading us to expect an increase in new orders for durable goods. New orders have begun to stabilize over the past four months, indicating that demand is picking-up and resulting in an increase in industrial production and manufacturing activity. As a result, we expect to see further improvement in industrial production.
Gross Domestic Product (Advance) (3Q09, Thursday 8:30 ET)
F: 4.1% C: 3.2% P: -0.7%
The economy in the third quarter is expected to expand for the first time since 2Q08, marking the beginning of the road to recovery. Consumption will drive the growth, as spending on durable goods, non-durable goods and services all increased. Meanwhile, the decline in non-residential investment is expected to slow. There are indications that investment in equipment and software has stabilized, but that in structures will continue to decline. Likewise, increases in housing starts indicate that the decline in residential investment may ease, but the component will remain weak. Lastly, net exports are expected to have a positive contribution as the increase in exports surpassed that of imports.
Personal Income and Outlays (September, Friday 8:30 ET)
F: 0.2%, -0.2% C: 0.0%, -0.5% P: 0.2%, 1.3%
After rising 1.3% in August partially due to a boost from the Cash for Clunkers program, personal consumption expenditures are expected to adjust downwards in September. Nevertheless, the average increase for the quarter is forecasted to be positive. Given the weak labor market, personal income is expected to increase slightly, but will remain at low levels as upward pressures on wages are minimal.
