The 6 Economic Indicators to Follow This Week

This week we will receive a flood of US economic data. Just this morning, US Industrial Production reported a month over month (MoM) decrease of 0.11% in October, missing the Estimize consensus for an increase of 0.23%. Weakness was seen in mining, which fell 0.9% after a 1.6% boost in September, and utilities, which slipped 0.7% after surging 4.2% in September. Manufacturing growth remained respectable, increasing 0.2% during the month.

Also out this week:

Tuesday

Producer Price Index (PPI)

Tomorrow we will get a read on inflation when October results are released for the Producer Price Index. While the Consumer Price Index (which reports Thursday) is seen as the most important measure of inflation because of its impact on setting interest rates, the PPI provides an earlier look by monitoring price pressures that are in the pipeline. These changes in price often trickle down to the consumer. The Estimize community is expecting the index to show a decline 0.03% for the month of October, after a decline of 0.09% in September.

Wednesday

US Housing Starts

The most closely followed report on the US housing market releases October results on Wednesday. This indicator is important because it indicates the beginning of intended residential construction and reflects the commitment and optimism of builders. This indicator also has a high multiplier effect, as purchases of household furnishings and appliances quickly follow, a trend we've seen these last few months as home improvement stores have done very well in the third quarter earnings season. For October, Estimize is expecting Housing Starts to increase 0.42% MoM, this is on top of the 6.27% in September and the -12.84% in August. This data has run very hot and cold the last couple of months, on Wednesday, we'll be looking for signs of stability.

Thursday

Consumer Price Index (CPI)

The Consumer Price Index is the mostly widely followed inflation indicator. The Estimize community is looking for CPI to show a decrease of 0.1% in October, in-line with the slight decline expected for PPI. The index increased 0.09% in September. There is no doubt that this expected decrease is due to the steep decline in energy prices, with gasoline at a four year low and more than able to offset the rising cost of food, particularly meat, dairy and grains.

Existing Home Sales

Existing Home Sales will also report on Thursday, another significant gauge of the housing sector as existing homes account for a larger share of the market than new homes. Like Housing Starts, this data also exhibits a large ripple effect, particularly amongst home improvement retailers. For October, the Estimize community is expecting Existing Home Sales to hit 5.15M, which would show a detraction of -0.38% MoM, after September increased 2.38% to 5.17M.

Philly Fed Manufacturing Activity Index

The Philly Fed's Survey on manufacturing conditions is out Thursday; this reading is highly correlated with the ISM Manufacturing Index and the Index of Industrial Production which showed a decline when results were released earlier this morning. The Estimize consensus for the Philly Fed index is -0.83% MoM for October, on top of an 8% decline in September.

Initial Jobless Claims

Jobless claims are anticipated to come in at 280,049 this week, down 3.34% from last week which posted an increase of 4.32%. In the last 8 weeks, jobless claims have risen 4 times and fallen 4 times, a sign that the US employment situation, although making great strides, is still not sturdy.