This Week July 13-17
Fed to Offer Prognosis on Rest of Year
Retail sales figures are expected to show a 0.4 percent gain as consumers regain confidence.
(Paul Sakuma - AP)
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
This week, we find out just how bad Federal Reserve leaders expect the economy to be for the remainder of 2009, and how long they think a recovery could take.
Along with minutes being released Wednesday of their late June policymaking meeting, the Fed is scheduled to issue projections for unemployment, inflation and growth over the next few years. Expect a downgrade from the last time the Fed published projections.
In late April, the consensus of 17 Fed governors and reserve bank presidents was that the unemployment rate will be 9.2 to 9.6 percent in the final months of 2009. Given that the jobless rate was 9.5 percent in June and is rising every month, the actual number looks increasingly likely to top 10 percent.
In the longer term, Fed leaders' forecasts in April were for a 7.7 percent to 8.5 percent jobless rate at the end of 2011. If those numbers also grow, it will be sign that the policymakers have concluded that the recession will be worse -- and longer -- than previously thought.
The Fed's meeting minutes should also offer the most extensive discussion yet of how the policymakers view their options to bolster the economy. The Federal Open Market Committee took no action to expand its purchases of mortgage-related securities and U.S. government debt at that meeting, but the minutes could shed light into whether such steps might be an option in the months ahead, especially if the economy keeps deteriorating.
That comes in a busy week for economic data, highlighted by retail sales (tomorrow) and industrial production (Wednesday). Expect mixed signals; retail is expected to show a solid 0.4 percent gain, consistent with consumers becoming more confident. But industrial production is expected to have fallen 0.6 percent, reflecting a factory sector that remains in free fall. Also this week: the producer price index comes out tomorrow, the consumer price index Wednesday, and housing starts on Friday.
-- Neil Irwin
NEIL's MUST-READS:
In a post on the New York Fed's Web site, Fed economists explore the role that productivity gains played in the housing bubble, and Vanity Fair offers a good read on the unit that brought down American International Group.
