By Matthew Gardner, Gardner Economics LLC
July 19, 2010

What to Watch This Week

• I am expecting to see further contraction in housing permits across the U.S. as builders remain wary of demand for housing following expiration of the tax credit. I expect this tocontinue the rest of the summer. We will also see a contraction in housing starts for the same reason.
• Initial and continuing employment claims should continue to show modest improvement but not at the pace that all of us would like to see.
• Existing home sales figures, released on Friday, will also show a substantial drop following the boost in sales from the tax credit. It would not surprise me to see a figure of 5.1 million sales (annualized) from last month’s figure of 5.66 million units.

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By Matthew Gardner, Gardner Economics LLC
July 12, 2010

What to Watch This Week

• Last week was fairly slim when it came to economic announcements; however, this week there is far more to sink our teeth into. I will be delving into our local employment situation for June when data is released on Tuesday. Although I do not believe that we will see positive growth on a year-over-year basis quite yet, we are on the verge of it and recent month-over-month numbers have shown signs of growth in some sectors. The unemployment rate might bump up a little with temporary census workers contracts ending, but this decrease is fairly minimal.
• Retail sales figures will continue to point to improvement and that consumers are buying, albeit modestly. Last months figure of negative 1.2 percent will likely improve to negative 0.1 percent.
• Business inventories should contract slightly as demand for goods grows.
• Prices paid at factory gates (PPI) will show a very slight increase, furthering my belief that inflation remains very tame.
• Consumer prices, which retracted slightly in May, will more than likely stay flat in sync with the PPI figure.
• I am hopeful that initial employment claims, which came in better than expected last week (see below), will continue to show modest improvement. 

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By Matthew Gardner, Gardner Economics LLC
July 06, 2010

What to Watch This Week

• We will get data on housing transactions for our market on Tuesday and I anticipate that we will see the highest transactional figures for the year as we see the end of the tax credit. I believe that figures for both King and Snohomish counties will be moderately higher than the prior month, and we will see continued stability in transactional prices.
• The Institute for Supply Management figures will likely remain about where they were in May (55.4).
• I hope that we will see weekly employment numbers show very modest improvement but improvement all the same. Nothing stellar to report yet, and I anticipate that gains will be sluggish throughout the summer.
• Consumer Credit figures are the only other data point in this shortened week that is worthy of discussion. I anticipate that we will see further erosion in credit, especially revolving credit, and a likely slowdown in non-revolving credit. We are still cautious and maintain our posture of retiring debt, especially credit card debt as we become able to.

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By Matthew Gardner, Gardner Economics LLC
June 28, 2010

What to Watch This Week

• Personal incomes should increase very modestly, and I hope that we will see a tiny increase in expenditures as consumers no longer fear the shopping mall as much as they have been!
• With eyes firmly fixed on the Case Shiller index, I anticipate that we will see a moderate increase in year-over-year prices to around 3.5 percent. Locally, I expect that the Seattle area will continue to claw its way upward toward positive annual appreciation, but we will likely still be short.
• Consumer confidence figures should decline slightly as we remain uncertain on the job front.
• Construction spending should also see retraction as homebuilders worry about demand for their product following conclusion of the tax credit.
• Pending home sales, which saw tax-credit inspired advances last month, will retreat with the end of that program. Do not be surprised if we see a reduction of up to 10 percent here.
• The big number comes in at the end of the week with monthly data on employment and the unemployment rate. I anticipate that we will see the unemployment rate remain static at 9.7 percent, but it is likely that we will see a modest reduction in non-farm payrolls as gains from Census hiring fade.

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