The Economics/Business News Week Ahead

The Federal Reserve's annual Jackson Hole conference will highlight the week with a speech on Friday from Jerome Powell, who reports say will offer analysis why inflation, despite a strong labor market, has been subdued. FOMC minutes from the meeting earlier this month will be posted on Wednesday in a meeting that upgraded the economy and household spending and made no recognition of President Trump's call for the Fed to keep rates low. Housing will be a highlight of the week with improvement the call for existing home sales on Wednesday as well as new home sales on Thursday and a moderate rise for the FHFA house price index also on Thursday. Factory news is also slated in the week including the Kansas City manufacturing index on Thursday and durable goods orders on Friday where a strong gain for capital goods is the forecast.

Wednesday

Existing Home Sales for July

Consensus Forecast, Annualized Rate: 5.425 million

Consensus Range: 5.400 to 5.509 million

Existing home sales have been flat and at the low end of expectations this year. But based on a rise in pending sales, forecasters see improvement for July, to a 5.425 million rate from 5.380 million in June.

FOMC Minutes

Covering the July 31 & August 31 Meeting

The FOMC statement on August 31 didn't include too many surprises as rates, after a hike in June, were held unchanged and members were mum on President Trump's call for the Federal Reserve to keep rates low. But the assessment of the economy was upgraded to strong from solid as was the assessment of household spending. Upgrades for these are consistent with what most expect for the remainder of the year: two more 25-basis-point rate hikes.

Thursday

Initial Jobless Claims for August 18 week

Consensus Forecast: 215,000

Consensus Range: 210,000 to 220,000

Initial claims are expected to come in at 215,000 in the August 4 week vs 212,000 in the prior week. All readings in this report are at or near historic lows and consistent with strong demand for labor.

FHFA House Price Index for June

Consensus Forecast, Month-to-Month Change: 0.3%

Consensus Range: 0.2% to 0.6%

Though still too high for many buyers, home prices have been cooling along with sales and are part of the cracks appearing in the housing sector. The FHFA house price index has managed only very small gains the past three reports with a bit better gain, at 0.3 percent, the consensus for June.

PMI Composite for August Flash

Consensus Forecast: 55.6

Consensus Range: 54.0 to 56.3

PMI Manufacturing

Consensus Forecast: 55.2

Consensus Range: 54.8 to 55.9

PMI Services

Consensus Forecast: 56.0

Consensus Range: 54.0 to 57.0

Moderate-to-strong has been the signal from the PMIs with capacity constraints cited as a factor that is limiting growth. The consensus for August's flash PMI composite is 55.6 with PMI services at 56.0 and PMI manufacturing seen at 55.2.

New Home Sales for July

Consensus Forecast, Annualized Rate: 648,000

Consensus Range:  630,000 to 660,000

New home sales have been struggling to move higher but forecasters do see strength for July, at a consensus annualized rate of 648,000 vs 631,000 in June. Prices were down in the June report while supply moved into the market, both positive indications for the July report.

Kansas City Manufacturing Index for August

Consensus Forecast: 23

Consensus Range: 22 to 25 

Steady strength at a high level is the forecast for the August edition of the Kansas City manufacturing index, at a consensus 23 in August in what would be unchanged from July. The July report saw a little less acceleration in orders and production but even more stress in deliveries and prices.

Friday

Durable Goods Orders for July

Consensus Forecast, Month-to-Month Change: -0.2%

Consensus Range: -1.7% to 4.0%

Durable Goods Orders, Ex-Transportation

Consensus Forecast: 0.4%

Consensus Range: -0.3% to 1.0%

Durable Goods Orders, Core Capital Goods (Nondefense Ex-Aircraft)

Consensus Forecast: 0.6%

Consensus Range: 0.4% to 1.2%

A step back for aircraft is expected to pull down durable goods orders by 0.2 percent in July with ex-transportation, however, seen at a respectable 0.4 percent gain. Core capital goods orders (nondefense ex-aircraft), which slowed in June, are seen up a very strong 0.5 percent. Unfilled orders in this report have been rising which is a tangible confirmation of strength in the factory  sector.