This Week June 29-July 3
Seeking Signs Of Stability In Job Numbers
Last week's economic data brought largely better-than-expected news about manufacturing and consumer spending. Orders for appliances, autos and other durable goods rose sharply in May. And consumer spending bounced back for the first time since February, though the rebound was partly because of a one-time spike in income generated by the government stimulus package.
Even though the recession is showing signs of letting up, the unemployment rate, now at 9.4 percent, is expected to climb past 10 percent by year's end. High unemployment could prolong the foreclosure crisis, stifle consumer spending and keep a recovery from taking hold.
So how close are we to reaching double-digit unemployment?
We find out Thursday when the Labor Department is scheduled to release the June jobs report, along with initial jobless claims for last week.
Financial markets will be looking for further signs that the pace of job cuts is slowing. Analysts estimate the economy shed 350,000 to 385,000 jobs this month, close to May's tally of 345,000. That level of job loss is high by normal standards but is far better than the 500,000-plus losses of just a few months ago.
Initial jobless claim numbers will also be of high interest because they tend to peak toward the end of a recession. Analysts say claims may have peaked in March, but they're still looking for new claims to sink below the 500,000 mark, which would suggest the labor market is stabilizing.
Other data out this week may provide clues as to when the housing market will hit bottom. Tomorrow, Standard & Poor's releases the Case-Shiller home-price index for April, followed on Wednesday by the Commerce Department's report on construction spending for May.
We also learn whether the contraction in manufacturing slowed further this month. On Wednesday, the Institute for Supply Management releases its business activity index for June. Last month, the ISM's new-orders index edged above 50, the threshold for growth, for the first time since November 2007.
-- Annys Shin
ANNYS SHIN'S MUST-READS: Business Week's Michael Mandel makes a case that the last 10 years marked "A Lost Decade for Jobs," and New Yorker writer Connie Bruck profiles Angelo Mozilo, the son of a butcher turned head of lender Countrywide Financial.