Reports on housing and inflation figure will weigh strongly on Fed - Trade Only Today

Reports on housing and inflation figure will weigh strongly on Fed

We’re just a month away from the next Federal Reserve meeting and Fed watchers are tracking economic reports the way baseball fans engage in scoreboard watching during a pennant race.
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We’re just a month away from the next Federal Reserve meeting, and Fed watchers are tracking economic reports the way baseball fans engage in scoreboard watching during a pennant race.

That’s because the Fed’s Sept. 16-17 meeting has been seen as the most likely moment in years for the central bank to deliver a rate increase. Will the job market, consumer spending and inflation come together in a way that prompts the Fed to act? It’s not yet clear, but the coming week will bring several key reports with a strong influence on the outcome.

Data on housing starts and building permits for July will come today and will be the last ones on those segments of the economy before the Federal Open Market Committee meets next month. Likewise the Consumer Price Index and core CPI for July, due Wednesday, and a report on July home resales, due Thursday, will be the last figures of that type the Fed sees ahead of its meeting.

The Fed itself will make news Wednesday when it releases the minutes from its July meeting. Fed chairman Janet Yellen said at the time that the central bank saw continued growth in the U.S. economy and in the workforce, “but a deeper dive into the minutes from that gathering could offer insight into how strongly Fed leaders feel about raising rates sooner rather than later this year,” Fortune reported.

If fresh forecasts prove correct, the Fed is likely this week to again see signs that the economy is strengthening. According to Market Watch, consensus forecasts are that July housing starts will total about 1.185 million, up slightly from 1.174 million in June, which was the second-highest level since 2007, and that home resales will be about 5.48 million, down slightly from 5.49 million in June, which was the fastest pace in more than eight years.

The consensus forecast for the CPI and core CPI is for increases of 0.2 percent in both. The CPI rose 0.3 percent in June.

Ahead of the new reports, Business Insider sees businesses and consumers delivering the kinds of numbers that are nudging the central bank toward a September rate increase.

The Commerce Department said Thursday that retail sales rose 0.6 percent last month. Sales climbed in most categories. At auto dealerships they increased by 1.4 percent after falling 1.5 percent the previous month.

“The consumer-driven recovery of the economy continues on track,” Harm Bandholz, chief U.S. economist at UniCredit Group in New York, told Bloomberg. “The fundamentals are all in place for solid consumer spending. The outlook remains strong for the second half of the year.”

Bloomberg said rising employment, stronger finances and still-cheap fuel are helping to draw consumers into stores and auto dealerships.

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