• Home ::
• Fundamental ::
• Market View ::
• Weekly Observatory

• Send
• Print
• Add To
• Rss

Weekly Observatory

July 7th − 11th, 2008

Mon, Jul 7 2008, 08:13 GMT
by Marcial Nava, Alejandro Neut

BBVA Bancomer

Import Price Index (June, Friday 8:30)

F: 1.6% C: 1.8% P: 2.3%

Rising energy prices and dollar weakness continue to boost import prices. On a year-over-year basis, import prices have risen at double digits rates, reaching 17.8% in May, the highest since April 1989. Higher import prices inflation posse an important risks to core CPI outlook. However, this risk may be counterbalanced by the current economic downturn.

Pending Home Sales (May, Tuesday 10:00)
F: -2.2% C: -2.5% P: 6.3%

In line with the ongoing adjustment in the housing sector, we expect a 2.2% decline in May’s pending home sales, anticipating a disappointing report of existing home sales in June. Housing demand keeps falling despite lower mortgage rates; and given the substantial levels of inventories, it will decline further through the rest of the year.

Consumer Sentiment (Jul, Prel., Friday 8:30)
F: 51.0 C: 56.0 P: 56.4

Things are getting worse for consumers. The average gasoline price continues to the upside and has already exceeded $4.00 per gallon. Higher energy prices are forcing consumers to change spending patterns, something that has started to be reflected by demand of durable goods, particularly autos. In addition, labor markets have experienced significant losses particularly in construction, manufacturing and financial sectors. Thus, we expect the U of Michigan Consumer Sentiment Index to decline further in July.

Trade Balance (May, Thursday 8:30)
F: -62.0B C: -62.1B P: -60.9B

The trade deficit probably increased in May as higher energy prices boosted the value of imports. When adjusted for prices changes, imports of goods have declined by an average yoy rate of 0.8% from January to April. On the other hand, real exports of goods have increased by a solid 10% in the same period. The net effect of international trade’s dynamics has been a positive contribution to GDP growth, which is likely to continue in the next quarters boosted by dollar weakness and economic growth overseas.

Initial Unemployment Insurance Claims (July 5th, Thursday 8:30)
F: 385K C: 385K P: 404K

Initial claims rose substantially over the past five weeks, suggesting that labor market conditions worsened. In fact, the nonfarm payroll lost 62,000 jobs in June. Meanwhile, continuous claims continued on its upward trend, implying that unemployed persons are spending more time without a job. In June, the unemployment rate remained steady at 5.5%, the highest since April 2004. Job losses are likely to continue in the next months, affecting the pace of personal income and consumer spending. We expect initial jobless claims to remain relatively high at 385K for the week ending July 5th, consistent with a negative payroll reading during the month.

• Download full Weekly Observatory with charts

Published on  Mon, Jul 7 2008, 08:19 GMT

Archive

• August 11th, 2008
  Published On Mon, Aug 11 2008, 13:06 GMT
• August 4th, 2008
  Published On Tue, Aug 5 2008, 09:33 GMT
• July 28th, 2008- August 1th, 2008
  Published On Mon, Jul 28 2008, 08:03 GMT
• July 7th - 11th, 2008
  Published On Mon, Jul 7 2008, 08:13 GMT
• June 30th, 2008
  Published On Mon, Jun 30 2008, 08:20 GMT

[ View All ]

• More Reports from this Author
• More Reports from this Contributor

BBVA Bancomer  | Av. Universidad 1200 Col. Xoco México 03339 D.F.
http://www.bancomer.com/economica | e.economicos@bbva.bancomer.com