By Matthew Gardner, Gardner Economics LLC
August 23, 2010

What to Watch This Week

• Existing home sales for the month of July will be announced on Tuesday, and I expect that we will see further declines to an annualized rate of 5.14 million units from June's number of 5.37 million. We will continue to experience a "payback" following the high demand from buyers that took advantage of the tax credit, which will weigh down transactions. Additionally, and as I have said before, I am noting that buyers appear to be in no big hurry to transact, and this too will pull the number down.
  Year-over-year home prices have seen some stabilization in recent months, and it will be interesting to see where this number ends up considering 32 percent of June’s transactions were distressed sales which generally sell for lower prices.
• Durable goods orders for July should swing upward from its negative figure last June. Manufacturing has been hit hard, and I am hopeful for a good figure here.
• New home sales, which jumped last month, are likely to see an additional uptick, but I am slightly cautious here. The increase that we saw in June was partly attributable to a downward revision in May's figures. Still, I am looking for an increase to 338,000 units (annualized) from 330,000 in June.
• Initial unemployment claims, which were not at all good last week, are likely to remain elevated at just below the 500,000 mark. This is certainly not good, but I discuss my reasoning for not being totally despondent with the numbers below.
• The latest estimate for U.S. GDP is likely to be revised lower, and I am looking for a figure of 1.4 percent from the initial estimate of 2.4 percent. All indications are that the government overestimated growth last quarter.
• Revised consumer sentiment figures for August will remain basically where the advanced figures were (or maybe just a hair higher) than the 69.6 number announced earlier this month.

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By Matthew Gardner, Gardner Economics LLC
August 9, 2010

What to Watch This Week

• It is likely that we will see productivity figures, which will be released on Tuesday, show an uptick as we continue to work employees harder instead of increasing hiring. This is supported by increases in the average workweek.
• The Federal Reserve is sure to keep interest rates where they are (0.25 percent), and I do not expect this to increase this year. In fact, the troubling payroll figures that we saw last week are likely to push the Fed to consider further accommodating actions to try and stimulate the very sluggish economic rebound.
• Inflation numbers, which will be released on Friday, will show an increase; However, the movement will be very modest. I am not concerned about inflation at this point.
• Consumer Sentiment numbers will be disappointing. I sometimes feel as if I am a broken record, but we are still concerned with the employment situation, and this will, yet again, weigh on this index.

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By Matthew Gardner, Gardner Economics LLC
August 2, 2010

What to Watch This Week

• General consensus is that we will see a reduction in construction spending when figures are announced today; However, I am not so sure. The improved sales that were announced last week may lead to a moderate increase in residential construction, but this may also be offset by weakness in the commercial sector.
• Personal incomes should rise, although the increase will be very modest. My model is calling for a 0.2 percent increase following May's 0.4 percent rise. We are not in an inflationary environment at the present time.
• Auto and truck sales numbers are also likely to see a modest bump that will be led by autos, but we will likely see a reduction in truck sales. Numbers are, however, well off the pre-recessionary levels.
• I will be focused on payroll numbers when they are announced on Friday, and I am predicting that we will see a modest rise following the 125,000 decline seen in June. As I mentioned earlier this month, June's decline was a result of laying off 225,000 Census workers, and in fact, private payrolls expanded by 83,000. I am looking for a modest gain in the July figures.
• Consumer Credit, which has been on the decline since October 2008, will continue its downward trend. We saw a very substantial reduction in revolving debt levels (-10.5 percent year-over-year), and this will continue to slide as banks contract further and consumers continue to try to deleverage.

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By Matthew Gardner, Gardner Economics LLC
July 26, 2010

What to Watch This Week

• New home sales numbers may be disappointing after they are released this morning; However, I personally think that there might be a little uptick as we come off the horrendous low of 300,000 units reported last month. The whiplash effect following the expiration of the tax credit pushed transactions to an all-time low, and being the contrarian I am, a small uptick may be on the cards. That being said, the numbers are sure to still be very low from an historic perspective.
• Tuesday's Case Shiller figures will likely show very modest improvement across the entire index, and as I have said for some months now, the Seattle region will continue to claw its way back into positive territory.
• I fear that consumer confidence numbers will continue to retract as the public agonizes over the snail’s pace of our economic recovery.
• Initial and continuing unemployment claims are likely to remain elevated. While we are seeing additional temporary hiring occur in the summer months, employers remain particularly cautious when it comes to new hires. I am sure that there are many readers with children home from school and who are wondering where all the summer jobs are!
• Consumer sentiment numbers are also released this week, and similarly to the confidence index, I expect that these numbers will continue to disappoint. Last month the figure remained benign, but I would not be surprised to see it lower as our economic engine continues to splutter and not roar.
• Finally, we will see the preliminary estimates for U.S. gross domestic product for the second quarter of this year. It is my anticipation that we should see a figure of around 2.7 percent annualized growth that will match that of the first quarter. This is far from stellar, but inventory growth will continue to keep this figure on positive territory.

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Hello, I am Sue Z. Hart, CEO of Little Red Wagon University; a company designed to help organizations and individuals discover for the power of success through simplicity and fun. I am excited to talk with you today about the tenuous job market.

One of the biggest mistakes I see people make when they lose their job, or we go into a slow economy is panic. My advice, don’t! Yes, you will have to map out a plan but once you have set your course, put it on cruise and embrace the opportunities! 

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