Key Economic Data Due This Week--Could Be Good News
Four key economic reports will be released this week that will be closely scrutinized by economists, business leaders, government officials, and investors for clues as to the pace of the economic recovery.
Four key economic reports will be released this week, including third-quarter U.S. economic growth, consumer confidence, durable goods orders, and initial claims for unemployment benefits. Economists, business leaders, government officials, and investors will scrutinize all four for clues as to the pace of the economic recovery.
Tuesday, the Commerce Department will release its first revision to third-quarter real (inflation-adjusted) economic growth. The preliminary growth figure, reported earlier, was 7.2% (on an annual basis), the strongest growth rate in nearly two decades. Since then, however, additional data has come in showing businesses increased inventories at a stronger-than-expected pace. As a result, many economists are expecting this figure to be revised upward, to as much as 8%.
While such a powerful growth rate cannot be maintained for a prolonged period, an upward revision that reflected stronger inventory growth would be a sign of increasing business confidence that the recovery has staying power. This, in turn, is a key element in maintaining the recent upward trend in capital spending, especially for technology. For the fourth quarter of this year, Computer Reseller News expects economic growth to come in at a slower, but still robust, pace of about 4%.
Also on Tuesday, the Conference Board will report its November Consumer Confidence Index. This figure, based on a representative survey of 5,000 U.S. households, provides a broad-based look at what consumers are thinking, both now and for the near future, in areas such as employment and personal finance.
The index increased in October to a reading of 81.1 (with 1985 = 100), and economists expect a further increase in November, to between 83 and 85. If such an increase is realized, it would be another positive sign for the economy going forward, particularly for consumer spending and retail sales as the crucial holiday season approaches.
Wednesday, figures will be released on manufacturers orders for durable goods in October. Durable goods are defined as large ticket items, such as automobiles and appliances that last three years or longer. Economists expect a solid increase in the range of 0.3% to 0.7%, reflecting continued strong consumer spending.
Finally, figures on initial claims for unemployment insurance in the week of Nov. 22 will also be released Wednesday. This figure provides clues as to trends in overall employment in the economy, with economists viewing a figure of 400,000 as the dividing line between job creation and job loss.
Over the past several weeks, initial unemployment claims have been below the key 400,000 level, an indication that the long-awaited recovery in the job market is at last under way. A figure in the range of 350,000 to 360,000 for Nov. 22 would be a sign of further strengthening in the job market. All eyes will be on the Dec. 5 release of the November employment figures, showing both the unemployment rate and the actual level of job creation (or loss), for confirmation of these trends.
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