November CPI Rate Expected to Hold Steady
Federal Reserve policymakers and investors probably will take comfort this week from yet another government report showing that the economy is forging ahead with little evidence of inflation. The consumer price index, to be released Tuesday by the Labor Department, is expected to have risen 0.2% last month after increasing 0.2% in October, analysts said. The core rate of the CPI, which takes out food and energy costs, probably rose 0.2%.
The CPI report will follow Friday’s report that the producer price index rose 0.2% in November--led by a rise in energy--following a 0.1% decline in October. The Labor Department is also expected to report Tuesday that average weekly earnings after adjusting for inflation rose 0.1% in November after rising 0.5% in October.
On Wednesday, the Federal Reserve will report on industrial production for November, which probably rose 0.3% after rising 0.7% in October, analysts predict. The plant-use rate last month probably held at 80.7%. The Commerce Department also will report Wednesday on October business inventories, which probably rose 0.4%, the same as the previous month.
Other economic data expected this week:
* U.S. demand for machine tools rose in October for the second consecutive month, pointing to an end to a recent slide in demand. A joint report released over the weekend from the American Machine Tool Distributors’ Assn. and the Assn. for Manufacturing Technology put demand for machine tools at $4.7 billion in the first 10 months of this year, down 30% from the same period in 1998. But demand rose 3.9% to an estimated $529 million in October, from a revised $509 million in September.
* The trade balance for October from the Commerce Department, to be released Thursday, is likely to show that the U.S. trade deficit in goods and services narrowed to $24.3 billion during the month from $24.4 billion in September.
* Housing starts figures from the Commerce Department on Friday are likely to show that housing starts rose 1.4% in November to a 1.648 million annual rate following a 0.1% increase to a 1.628 million pace in October. (Bloomberg News)
FDA Hearing Today: The Food and Drug Administration, which holds its third and final hearing on genetically modified foods today, says no one yet has presented convincing evidence that the products are a threat to public safety.
As the agency prepares to hear from dozens of people opposed to the technology at a hearing in Oakland, interviews with officials suggest that only minor changes in policing the controversial technology are being contemplated. “Just like all decisions, they need to be scientifically grounded first,” FDA Commissioner Jane Henney said. While “everything is on the table,” agency officials “have not seen anything that caused us to believe that there are safety issues here,” she said. The agency is accepting written comment through Jan. 13.
