A steady drumbeat of economic data this week should give a sense of October trends in inflation and economic output.
The Commerce Department releases retail sales data for October, which will be the first indicator of how American consumers held up as the fourth quarter got underway. Analysts expect the number to show a 0.3 percent rise, pulling back from a very strong 1.1 percent gain in September but nonetheless signaling continued growth in consumer spending. Excluding volatile automobiles and gasoline, the number is expected to rise a more modest 0.2 percent.
Also Tuesday, the Labor Department reports on October wholesale prices, which are expected to have edged down 0.1 percent after a sharp 0.8 percent September rise. That forecasted drop primarily reflects a receding in prices for oil and other commodities. Excluding food and energy, expect a gain of 0.1 percent.
The week’s second inflation indicator will be the consumer price index. Forecasters are looking for no change in consumer prices in October, following a 0.3 percent rise in September. They estimate a 0.1 percent rise in prices when food and energy are excluded. If the producer and consumer price indexes were to decline more sharply, it would increase the odds that the Federal Reserve will consider new monetary easing at its December meeting, though no action seems likely at this stage.
Also Wednesday, the Fed releases new data on industrial production, which has been a steady driver of economic activity amid the uneven recovery. Look for a 0.4 percent jump in output by the nation’s factories, which would be enough to boost the use of production lines to 77.6 percent, its highest level since August 2008.
Housing starts, a key leading indicator of residential construction, are expected to have fallen in October. Analysts predict a 7.9 percent fall, to an annual rate of 606,000 houses being constructed (down from 658,000 in September). In other words: The sector’s woes don’t appear set to be going away anytime soon.
Tim Duy at the Economist’s View blog games out where Europe goes from here. And financier James Rickards, in his new book, “Currency Wars,” argues that the world is poised for a round of competitive devaluation that could spiral in dangerous directions. A summary of his argument is available at the book’s Web site.
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