Looking Ahead: Week of January 29 to February 2
Market News International compiles a market consensus that surveys 15 - 20 economists each week.

Tuesday
Economists are predicting that the Conference Board's consumer confidence index will drop to 125.0 in December after falling 4.3 percentage points in November. The continued deterioration in consumer confidence will be a major concern for Federal Reserve officials. (Forecast range: 120.0 to 130.0)

Wednesday
The consensus forecast is showing that real GDP grew at a 2.0 percent rate in the fourth quarter, not very different from the third quarter pace of 2.2 percent, and significantly less than the 5.6 percent pace recorded in the second quarter of the year. (Forecast range: 1.2 percent to 2.9 percent) At the same time real final sales are predicted to grow at a 2.1 percent rate. This is weaker than the pace of the previous two quarters. (Forecast range: 1.7 percent to 3 percent) Finally, economists are predicting that the GDP deflator increased at a 1.9 percent rate - higher than the third quarter, but lower than the first half of 2000. (Forecast range: 1.7 to 2.2 percent)

Economists are predicting the Chicago purchasing managers' index will slide to 43.0 in January after inching up to 44.7 in December. The Chicago index is widely followed because its distribution of companies mirrors the nation. A drop in the Chicago index would point to a drop in the NAPM survey too. (Forecast range: 42.0 to 45.0 percent)

New home sales are expected to post a decline of 2.6 percent in December to an 885,000 unit pace. This would be similar to the drop recorded by existing home sales. Remember that weather conditions were extreme (more than seasonal) in a good chunk of the country and that is likely to dampen sales for the month. (Forecast range: 850,000 to 930,000)

The FOMC meeting begins on Tuesday and ends on Wednesday. The Fed usually makes its official announcement at 2:15 PM ET. Market players are looking for the Fed to reduce rates at least 25 basis points but as much as 50 basis points. The consensus seems to favor the larger rate cut.

Thursday
Market participants are expecting new jobless claims to increase 24,000 in the week ended January 27 from last week's 316,000 level. (Forecast range: -5,000 to +34,000)

The consensus forecast is calling for an increase of 0.2 percent in personal income for the month of December. This reflects the sluggish employment and earnings figures seen earlier this month. (Forecast range: -0.2 to 0.4 percent) At the same time, personal consumption expenditures are predicted to also post a 0.2 percent gain in December. This reflects sluggish retail sales and a relatively anemic holiday season. (Forecast range: -0.2 to 0.7 percent)

Economists are predicting that construction spending will decline 0.5 percent in December after decreasing 0.6 percent in November. Construction spending on nonresidential structures has shown strength this year; the drop in total construction mostly reflects the downward trend in the residential sector. (Forecast range: -1.0 to 0.2 percent)

The NAPM survey is expected to fall in January to 43.5 from a level of 44.3 in December. Any level below 44 percent, if sustained, signals a contraction in the U.S. economy, not just the manufacturing sector. (Forecast range: 41.2 to 46 percent) Economists are expected the price index to decline to 59 in January from 62.2 in December. (Forecast range: 52.0 to 63.0 percent)

Friday
The consensus forecast shows that nonfarm payrolls should post a gain of 75,000 for the month of January. This would be less than December's 105,000 gain, but larger than the 59,000 payroll increase recorded in November. January payrolls are notoriously difficult to predict because annual shifts in retail employment sometimes boost the total and in other years depress the total by a wide margin. (Forecast range: -35,000 to 115,000) Factory payrolls are predicted to drop 30,000 in January continuing the long-term decline in this sector. (Forecast range: -10,000 to -50,000)

The consensus forecast is showing little change in the civilian unemployment rate with a one-tick rise to 4.1 percent. The unemployment rate is considered a lagging indicator of activity and won't be the first bearish signal in a weakening economy in any case. (Forecast range: 4.0 to 4.2 percent) The average workweek is expected to inch higher to 34.2 from 34.1 reflecting better weather conditions in January than in December for most of the country. (Forecast range: 34.0 to 34.2) Finally, average hourly earnings are expected to increase 0.3 percent, less than the past few months. (Forecast range: 0.2 to 0.4 percent)

Factory orders are expected to post a 1 percent gain in December after gaining 1.7 percent in the previous month. This incorporates the 2.2 percent gain in durable goods orders, boosted by aircraft. Incidentally, the November figures for durable goods orders were revised down and this could signal a downward revision to total factory orders as well for November. (Forecast range: 0.3 percent to 1.5 percent)