In these volatile times, the data being released this week are likely to be scrutinized even more than usual for signs of whether the U.S. economy is rumbling along with continued growth or slipping back into recession.


Data on housing starts and industrial production are released. Economists expect housing starts to have fallen 4.6 percent in July, reflecting continued woes in the housing sector. With a continued overhang of foreclosed-on homes and soft prices, it is thought that builders began work on new homes at only a 600,000 annual rate, half the 1.2 million-plus new households that are formed when the economy is growing normally.

The nation’s industrial sector is projected to have grown nicely in July, with an 0.5 percent rise in industrial production forecast. But the Institute for Supply Management survey suggests that growth in manufacturing in July came nearly to a halt. The question for the nation’s factory owners is whether the more reliable industrial production figure will indeed give greater reason for optimism than the survey.


Inflation figures are particularly important right now, as the Federal Reserve will be watching them closely as it weighs whether to undertake any new actions to ease monetary policy.

The Labor Department reports on the producer price index for July, which is expected to show modest wholesale inflation of 0.1 percent. But excluding volatile food and energy, PPI is forecast to inch up a bit faster, at 0.2 percent.


More price and home sale data are out. Consumer prices are expected to have risen 0.2 percent in July, whether or not food and energy are included. If the numbers come in lower than expected, it would offer the Fed more comfort about extending its easy money policies further, while a surprise on the upside could lead to some gnashing of teeth among monetary policymakers.

Existing home sales are expected to have risen 2.7 percent in July, making up for an 0.8 percent June decline. Still, sales activity will likely remain well below its levels of just a few years ago.

—Neil Irwin

Must Reads

Michael Lewis continues his tour of the countries affected by the European debt crisis (see previously Greece and Ireland) to the nation on the other side of the losses — Germany. His shockingly scatological economic analysis of Europe’s largest economy is hard to put down. Also see The Economist’s take on the Federal Reserve and European Central Bank.

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