We may well see a continuation of the mixed messages on the state of the economy this week, following the market-moving news last week that the unemployment rate stayed flat at 10% as employers shed 85,000 jobs in December following a slight increase in jobs added in November.
The chairman of President' Obama's Council of Economic Advisers, Christina Romer, said on a Sunday morning talk show that those numbers indicated a "sense that we need to do more is overwhelming," and repeated the Administration's call for a tax credit to encourage businesses to add workers.
This week, we hear about the U.S. trade deficit on January 12 (the consensus is we'll see an increase in the trade gap); the Federal Reserve issues its beige book on January 13; and on Thursday the 14th we get the final word on retail sales for December (the consensus is that sales rose 0.4% from November) and first-time unemployment claims.
Finally, on Friday the 15th we hear about inflation (the consensus is that it is still under control), and capacity utilization and industrial production–both are expected to show continued increases. Also on the 15th comes the release of the University of Michigan/Reuters consumer sentiment index that will give a glimpse into consumers' psyches in the New Year.
This week, the House convenes on Tuesday the 12th; the Senate is scheduled to meet for a pro forma session only on the 19th, following the Martin Luther King federal holiday on the 18th. However, Congressional staffers are said to be hard at work trying to reconcile the differences between the House and Senate versions of healthcare reform legislation. In that same ABC News appearance referenced above, Christina Romer said the Administration was open to "tinkering" on one of the main funding mechanisms for reform: the excise tax on so-called "Cadillac" health plans.
As earnings season commences, JP Morgan Chase issues its fourth quarter and year end results on January 15. As the first of the big Wall Street firms to report (Citigroup, Bank of America, Morgan Stanley, and Goldman Sachs all report next week), the public and media uproar over the banks' bonus plans is likely to continue.
Finally, the Financial Crisis Inquiry Commission holds its first public hearings in Washington on the 13th and 14th. Its witness list includes the leaders of most of those firms.
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