The August 15 US data week will present fresh data for inflation, housing, manufacturing, and some broader measures of economic activity. It will be an opportunity to assess conditions as the third quarter 2011 got started, and if the hoped for pickup in activity in the second half of the year is in the works.
Tuesday, Wednesday, and Thursday will see the release of the July Import Price Index, Producer Price Index, and Consumer Price Index, respectively. Although each index reports on different aspects of prices, all should reflect the moderation in food and energy costs that were present in July. Some of the higher prices associated with supply chain disruptions after the earthquake in Japan should continue to ease, especially in prices for passenger cars. On the whole, we anticipate the data to fall in line with the Fed's expectation for headline inflation to "settle."
Data for the factory sector will include the two earliest of the District Bank surveys for manufacturing. The New York Fed's Empire State Survey for August will be released on Monday, and the Philadelphia Fed's Business Outlook will be on Thursday. Both indexes registered some improvement in July after slipping in June. Any further strengthening of an upward trend would be a relief after a few months of concerns about deterioration in this sector.
The July report on industrial production and capacity utilization on Tuesday should show some pickup in output. The utilities sector could provide a boost during a period of unusually hot weather in much of the country. Mining activity should also continue to rise. Manufacturing -- particularly for motor vehicles -- should be responding to some modest consumer demand.
The Conference Board's Leading Economic Index for July on Thursday should show another month of expansion, but it may be in part attributable to an unusual surge in M2 that took place in the latter part of the month. Other positive contributions should be from interest rates, jobless claims, and stock prices. Negative contributions are expected from consumer confidence and vendor performance.
Treasury International Capital System (TICS) numbers for June on Monday should reflect...Read more
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