INDICATOR: August Existing Home Sales
KEY DATA: Sales: down 1.8%; Prices (Year-over-Year): up 4.5%
IN A NUTSHELL: “The rotation from investor to homeowner continues and that is keeping a lid on housing sales and prices.”
Sept 16-17 ‘04 FOMC Meeting
In a Nutshell: "... a range of labor market indicators suggests that there remains significant underutilization of labor resources."
Rate Decision: Fed funds rate maintained at a range between 0% and 0.25%
INDICATOR: August Industrial Production
KEY DATA: IP: -0.1%; Manufacturing: -0.4%; Vehicles: -7.6%
IN A NUTSHELL: "If you believe that vehicle production is crashing, I have a bridge for sale and you can buy as much of it as you like."
KEY DATA: ADP: 204,000/ Layoffs: down 6,877/ Claims: 302,000 (up 4,000)
IN A NUTSHELL: "Declining layoffs and low jobless should mean strong job growth, even if the initial reading on the market doesn't indicate that."
KEY DATA: Pending Sales: +3.3%; Year-over-Year: -2.1%/ GDP: 4.2% (from 4.0%); Corporate Profits: +8.0%/ Claims: 298,000 (down 1,000)
IN A NUTSHELL: "If the housing market really is getting better, then there are every reasons to believe the strong growth seen in the second quarter can be repeated."
In a Nutshell: "... if progress in the labor market continues to be more rapid than anticipated by the Committee, then increases in the federal funds rate target could come sooner than the Committee currently expects ... Of course, if economic performance turns out to be disappointing - then the future path of interest rates likely would be more accommodative than we currently anticipate."
If you don't like two armed economists, you will truly dislike the talk that Fed Chair Janet Yellen gave today at the Federal Reserve Bank of Kansas City's Economic Symposium in Jackson Hole, Wyoming.
The greatly anticipated speech delved into the details of the labor markets, the impact of wages on inflation and the way that monetary policy should react. Of course, being a good economist and academic, Chair Yellen discussed all sides of the issues. For example, is the decline in the participation a result of changing structural factors such as the aging workforce or is a cyclical decline due to frustration that will unwind once the labor market firms more? The answer is, of course, yes. That is, it could be one, or the other or even both, which it likely is.
KEY DATA: Housing Market Index: 55 (up 2 points)
IN A NUTSHELL: "Builders may not be irrationally exuberant but the rise in confidence is an indication that the housing market is getting better."