Indicators May Show Economy Is Too Strong
Economic reports this week should show that with jobs plentiful and incomes rising, U.S. consumers are upbeat about their prospects and continuing to spend, setting the stage for the current expansion to become the longest in the country’s history. If anything, the week’s data could show times are almost too good. A Labor Department report coming Friday is likely to show a shortage of available workers that will hold November’s job gains to 210,000, according to economists. That would be almost a third less than October’s 310,000 increase. The unemployment rate is expected to remain at a 29-year low of 4.1%, although with the tight labor market it “may well ease to 4%,” said David Resler, chief economist at Nomura Securities in New York.
Federal Reserve officials will get some indication of inflation pressures Wednesday when the National Assn. for Purchasing Management releases its series of manufacturing indexes. While the overall index probably will be little changed, falling to 56.5 in November from 56.6 in October, analysts generally see factories expanding output.
Other economic data this week:
* Today, the National Assn. of Realtors is expected to report that sales of previously owned homes picked up in October after falling for three straight months. Home resales probably rose 0.6% last month to an annualized rate of 5.16 million units. That’s up from a 2.1% drop in September to a 5.13 million annualized rate. Sales in August and July also fell. On Thursday, the Commerce Department will report new home sales, which probably rose 6% to an annualized sales rate of 861,000, up from 811,000 in September.
* On Tuesday, the Conference Board’s index of consumer confidence is expected to be 133 in November, up from 130.1 in October. In June, the index rose to 139, the highest since October 1968.
* On Thursday, the nation’s retailers will report their sales for November. The numbers should reflect the busy post-Thanksgiving weekend shopping, and analysts expect a 3% to 6% increase over last year when November sales rose 4.4%.
