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A reading of "1" has the lowest impact on rates, while "10" has the highest. Although carefully verified, data are not guaranteed as to accuracy or completeness. BestInfo, Inc. cannot be held responsible for any direct or incidental loss or liability incurred by applying any of the information or opinions in this feature.
July 2 ● June Employment Report
Rate Impact: 10
The "Green Shoots" concept holds that emerging signs of an economic recovery will result in a full-blown turnaround by the end of this year. That's a key reason why the stock market has been rallying so hard since it hit bottom in early March. And while the May employment report released in early June was perceived as part of the recovery story, because the number of lost jobs was smaller than in previous months, the question is how long the optimists will be able to overlook the rising unemployment rate. It is forecast to continue escalating toward a double-digit level over the next several months.
July 8 ● May Consumer Credit Outlays
Rate Impact: 5
While the government has been trying to induce banks to lend more money to consumers and businesses, many financial institutions have been watching nervously as the credit card default rate rises into double-digit territory. If the trend continues, analysts say the banks could be looking at a $70 billion write-off. What to do? Many issuers are accelerating their efforts to stop the red ink by tightening credit standards. They've reportedly already closed many unused cards, lowered credit limits and slowed their new-card marketing efforts. In other words, they've been reducing expansion of credit based upon sound business principles. This is placing the government in a difficult position. It wants consumer spending to increase but at the same time has a responsibility to protect the banking system.
July 14 ● June Producer Prices
Rate Impact: 7
We learned in June that despite a shocking rise in wholesale gasoline prices, overall inflation was the lowest since the Truman Administration, when measured on a year-over-year basis. It doesn't feel that way to consumers. A new consumer sentiment poll shows expectations of future inflation are rising and putting a damper on spending. This new frugality on the part of the public is likely to continue for an extended period of time, as a combination of joblessness and rising fuel prices brings most discretionary spending to a halt. That's why some analysts don't see a housing recovery until next year, because a home loan requires a long-term commitment. And just as many businesses lack future "visibility," so do many households.
July 15 ● June Factory Capacity Use
Rate Impact: 6
While the Federal Reserve's monthly report on industrial production and factory capacity utilization is not necessarily a market-moving event, it does provide reliable insight into the state of the economy. And with overall capacity use having fallen to the lowest level since record keeping began in the late 1960s, with manufacturing capacity use having fallen to the lowest level since record keeping began in the late 1940s, there is no reason to believe the situation will sharply reverse in the months ahead. This can also be seen in the falling price of natural gas, which had been the traditional fuel for many factories. When we see capacity use rising from the 69 percent area toward a more-normal 80%, we'll know the economy is recovering.