In terms of what will move markets and make news this week, the economy remains at center stage following the heartening news of the past few weeks on home prices and jobs.
Weekly initial unemployment claims declined in the week ending August 1, the Department of Labor announced last week, while the unemployment rate edged down to 9.4%, according to the Bureau of Labor Statistics. The BLS noted, however, that the number of people actually looking for work–the civilian labor force participation rate–was off by 0.2% in July 2009 to 65.5%, and that the employment-population ratio, now at 59.4%, has declined by 3.3% since the current recession began.
Are we headed toward deflation? The consensus among economists is that the CPI for July to be released on August 14 will be only changed 0.1% from June. Of course, the consensus last week was that unemployment would increase from 9.;5% to 9.7%.
The Fed’s Open Market Committee meets August 11 and 12; the FOMC announcement on August 12 is expected to leave unchanged the Fed Funds target, but watch for market moving comments on the state of the economy. Retail sales for July will be announced the morning of the 13th.