The highlight in economic news this holiday-shortened week will be a speech by Federal Reserve Chairman Ben S. Bernanke.


The Institute for Supply Management releases its index of activity for the nation’s service businesses. The survey is expected to show a slowdown in the rate of growth for nonmanufacturing firms — but not outright contraction: Forecasters expect the index to fall to 51, from 52.7. (Numbers above 50 indicate expansion).


The Fed releases its “beige book,” a compilation of anecdotal information about business conditions prepared in advance of each policy meeting of the central bank. Look for a tone of caution and worry out of the Fed’s business contacts, but worry combined with expectations of continued expansion.


The Commerce Department will release new data on international trade in July. The report is expected to show a narrowing of the trade deficit in that month, to $51 billion from $53.1 billion, reflecting in part the falling price of imported oil.

The International Council of Shopping Centers releases sales data for major chain retailers in August, offering the first read on whether American consumers held back last month amid stock market volatility and a steep drop in consumer confidence surveys.

The main event Thursday will be a 1:30 p.m. speech by Bernanke at the Economic Club of Minnesota. The topic of the talk is “The U.S. Economic Outlook,” and it comes at a crucial moment: On Sept. 20 and 21, the Fed’s policy committee will meet and consider new steps that might help boost growth amid a deteriorating job market and slumping recovery. Monetary policy operates with a lag, so any change to policy depends not on what has happened in the recent past, but what Bernanke and his colleagues expect to happen in the future.

The open question for this speech is how much Bernanke has downgraded his expectations for growth next year in light of recent weakness, and whether he thinks inflation pressures will soon diminish as well, which would open the door for more monetary easing.

— Neil Irwin

Must Reads

Bank of England policymaker Adam Posen makes the case for the world’s central banks to intervene more aggressively to support growth, at Reuters. And have high levels of long-term unemployment changed the “natural” rate of unemployment? Three economists from the Federal Reserve Bank of Richmond argue it has.

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