Consumer Sentiment Report, ‘Beige Book’ Due

The effect on Americans’ confidence from the ongoing anthrax scare and other issues stemming from the Sept. 11 terrorist attacks will be evident in Friday’s report from the University of Michigan on consumer sentiment in October.

The university’s consumer sentiment index was 81.8 in September. the lowest in eight years. Confidence matters because it translates into consumer spending, which accounts for two-thirds of gross domestic product. If the economy has slipped into recession, its recovery will be tempered by weakened consumer spending.

Many analysts say the first recession in a decade began even before last month’s terrorist attacks. The Federal Reserve’s report card on the economy, called the “beige book,” is likely to show Wednesday how much falling confidence has cut into business in the last month.

The Fed’s beige book survey of regional economic conditions was conducted from mid-September to mid-October. It will describe how businesses view the economies in each of the Fed’s 12 districts, and has taken on heightened significance as the terrorist attacks make conditions difficult to gauge statistically.

The Fed will use the report when it meets Nov. 6 to discuss whether to reduce interest rates for a 10th time this year to combat the chance of recession.

Bloomberg News

Other economic reports coming this week:

* Today, the Conference Board will issue its September index of leading economic indicators, intended to project growth over the next half-year.

* Thursday, the National Assn. of Realtors will report on sales of existing homes for September.

* Thursday, the Labor Department will issue its employment cost index for the third quarter. The index tracks wages and benefits.

* Friday, the Commerce Department will report on new-home sales ifor September.

* Friday, the Commerce Department will report on factory orders for durable goods made in September.