Next Week

November 21, 2008

Households will be in the spotlight of U.S. data during the week of Thanksgiving. House price indices from OFHEO and Case-Shiller, as well as existing and new home sales, will provide a reality check on the housing sector. Measures of consumer sentiment arrive from both the Conference Board and University of Michigan. Personal income and and spending figures will shed light on the consumer’s ability to sustain spending, willingness to do so, and efforts to rebuild savings. Weekly new jobless claims will track the latest pace of layoffs and hold particular interest as this is the survey week for the monthly labor report. The U.S. also releases the second estimate of third-quarter growth, durable goods orders and the Chicago PMI. The Obama cabinet will continue to take shape and draw instant analysis from the TV, radio, and wire service pundits.

The role of Thanksgiving cannot be understated especially in fearful times like these. Families gather together from the far reaches of the country, sharing food but also tales of economic conditions in their areas. Every dining room table becomes a clearing house for anecdotal evidence of the recession. On Friday, the stampede of Christmas shopping begins. How deep will the bargains have to be to entice the usual crowds at the malls? The first signs will be seen of how low fourth-quarter growth might be. And on the following week, some people, whose thinking crystallized after Thursday conversations, will go to the marketplace and cast a thumbs up or down.

Japan also has a Thanksgiving holiday, only it is on Monday. Then when many Americans are taking a four- or five-day holiday, the usual end-month barrage of Japanese data will bubble up, covering the labor market, household income and spending, retail sales, consumer prices, industrial production, housing starts, manufacturing sector activity, construction orders, and sentiment among smaller firms. Earlier in the week, the Bank of Japan releases its monthly economic assessment and corporate service prices.

It will be a pretty busy time also in Euroland and Britain. From the former, investors await business and consumer sentiment from Germany, France and Italy, details of Germany’s 0.5% third-quarter decline of GDP, German and Italian consumer prices, French and Italian producer prices, German labor statistics, French housing starts, and a reading on Italian service-sector activity. From Euroland as a whole, arriving data will document money and credit growth, sentiment in the corporate and household sectors, the current account and a preliminary indication of CPI inflation.

British Chancellor of the Exchequer Darling will deliver his pre-budget statement on Monday, which will contain details of a proposed fiscal stimulus and economic projections. The second estimate of U.K. GDP last quarter is also due Monday. Later in the week, investors will get a look at consumer confidence, the CBI monthly survey of retailers, and BBA mortgage lending figures.

Canadian retail sales, producer prices, raw material prices and current account flows will be reported next week. Australia releases information on investment spending and construction last quarter, as well as monthly private credit growth.

There are no scheduled central bank meetings among the advanced economies I routinely follow. However, in this age of crisis management, central banks feel free to make a change whenever deemed necessary. The Swiss rate cut of 100 basis points this past week was a prime example of monetary officials taking such a liberty.

Have a good weekend, everybody.


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