Initial Unemployment Insurance Claims (w/e Nov 6, Thurs 8:30 ET)

F: 509K C: 510K P: 512K

Initial unemployment insurance claims are expected to drop slightly to 509K, but they will remain high as a reflection of the ongoing weakness in the labor market. Although initial claims have been exhibiting a downward trend since April, progress has been slow. Businesses are continuing to cut costs even as economic activity begins to improve. As a result, the weak labor market is one of the primary risks facing household spending as consumers will spend cautiously until their confidence in the labor market resumes. These factors are illustrated in our baseline expectation of low PCE in 4Q09 and 2010.


Federal Budget (October, Thursday 2:00ET)

F: -$199.4B C: -$150.0B P: -$155.53

The federal budget deficit is expected to rise further in October. The government deficit amounted to $1.4 trillion in fiscal year 2009, ending September 30th. This amount is more than three times the deficit in fiscal year 2008. Looking forward into fiscal year 2010, we expect the deficit to amount to $1.3 trillion as public spending rises further to support the fiscal stimulus package. On the other hand, revenues are expected to rise as the government benefits from economic growth.


U. of Michigan Consumer Sentiment (November, Friday 9:55 ET)

F: 71.5 C: 71.0 P: 70.6

Consumer sentiment is expected to creep up slightly in November due to additional signs of economic improvement. The indicator has been exhibiting an upward trend, which is expected to continue, since March. Nevertheless, the pace will be slow. The primary obstacle to consumers’ outlook is the labor market. The unemployment rate has risen to the highest level since 1983 and layoffs are ongoing. Furthermore, businesses will most likely remain conservative in their hiring practices even as economic growth takes hold given the expectation of a slow recovery.


International Trade Balance (September, Friday 8:30 ET)

F: -$30.68B C: -$31.8B P: -$30.71B

Both exports and imports have risen in recent months, reflecting an increase in demand both at home and abroad. This trend is expected to continue in September, leaving the trade balance relatively unchanged. Although domestic demand is increasing, it is expected to be slow as U.S. consumers continue to suffer from a weak labor market, limited access to credit and low household wealth. Furthermore, many of the U.S.’s trading partners are emerging from the recession at a faster pace. As are result, export growth could surpass that of imports, leading to a positive contribution of net exports to GDP growth.