According to Global Insight
there are mercifully few data releases this week, which will at least temporarily interrupt the torrent of bad news.
The economic outlook is worsening daily. The latest retail sales, durable goods, employment, and industrial production reports and manufacturing surveys indicate that the economy was contracting sharply as the third quarter ended, even before October's extreme financial turmoil. The limited evidence so far for October from the New York and Philadelphia manufacturing surveys shows another sharp deterioration.
The questions now are how deep and prolonged the recession will be, and when the National Bureau of Economic Research (NBER) will make the official recession call.
The index of leading indicators should show an improvement in September, but unfortunately not one that will be sustained in October. The other major release, existing home sales, should show improvement in September, based on the upbeat signal from pending home sales. Again, the good news will not last. Key U.S. data releases this week
Monday – Leading Economic Indicator What to Look For
Improvement driven by financial conditions-money supply and yield curve.
Hours worked, unemployment insurance claims, housing permits, stock market all negative.
All evidence seems to show the economy turning down very sharply, yet the leading economic indicator index is poised to show an improvement in September. The increase in the index will be driven by financial indicators-the money supply and the yield curve-reflecting the Fed's efforts to support the economy. Normally, a rising money supply and a steep yield curve would say that financial conditions are getting easier. Unfortunately, in present circumstances that's not the case, because the credit crunch means that financial conditions are getting tighter.
October's plunges in equity prices and consumer sentiment will pull the leading indicator index back down again next month. What to Look For
Sales to rise to a 5.1-million-unit annual rate.
Another improvement in the West.
In August, the Pending Home Sales Index jumped 7.4%, improving in all four regions. Based on this unexpected rebound, we project that September existing homes sales rose 3.9%, to 5.10-million units (annual rate), with the West accounting for the lion's share of the increase. Lower house prices have spurred sales, especially in the West. But tight credit, higher mortgage rates, and a worsening economy will bring sales down again soon.