It will be a very busy week for economic news as Fed Chairman Ben S. Bernanke goes before Congress.
Trade figures are released. Economists expect that the trade deficit widened to $44.1 billion in May, from $43.7 billion in April. That wider deficit would be one of many factors in soft overall economic growth in the second quarter.
The Federal Reserve, meanwhile, plans to make public minutes of its June 21-22 policy meeting, where the Federal Open Market Committee agreed to end its program of bond purchases as scheduled and declined to take any new action to boost the economy. The minutes should offer greater clarity on how Fed officials are viewing the economic risks facing the country.
Bernanke begins two days of testimony as he makes his semiannual report on monetary policy. The first day, he is scheduled to speak to the House Financial Services Committee (Thursday, he goes before the Senate Banking Committee).
Expect Bernanke to face questions about the weaker employment situation, as reflected in the terrible June employment report released Friday; the Fed’s intentions in terms of future policy; and the risks to the U.S. economy from the European debt crisis.
And this being Congress, fiscal policy and the debt limit will not likely be far from their minds: Expect many members of Congress to push Bernanke to take a side in the roiling debate over taxes, spending and raising the debt limit. Look for Bernanke to point out that failure to raise the debt limit could be disastrous for the economy, but to decline to take a stand on specifics.
A report on retail sales is due. Analysts expect the number to be flat in June, after a slight decline in May. Excluding volatile automobiles and gasoline, sales are forecast to have risen a healthy 0.4 percent.
More economic data are out. Inflation looks set to fall in June, with the consumer price index forecast to drop 0.1 percent because of lower fuel prices. It would be a welcome change after months of rising. But keep an eye on inflation excluding food and energy, which has been creeping up. It is expected to be 0.2 percent in June.
Industrial production, meanwhile, is forecast to have grown 0.3 percent in June.
What are some ways to raise government revenues to help reduce the budget deficit in ways that would not (necessarily) be classified as tax increases and therefore be more acceptable to Republicans? Pete Davis has five possibilities at the Capital Gains and Games blog.
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