Looking Ahead: Week of June 24 to June 28

Market News International surveys between 15 and 20 Wall Street economists each week for their forecasts of economic indicators.

Tuesday

Economists expect that the Conference Board’s consumer confidence index will post a drop in June to a level of 105 from May’s 109.8 level. The mid-month reading on the University of Michigan’s consumer sentiment index showed a sharp decline, no doubt related to the downward trend in stock prices and consumers’ feelings that their wealth is being eroded. (Forecast range: 103 to 109)

Existing home sales are expected to post a 2.4 percent drop to a 5.65 million-unit rate in May after rising 7 percent in April. There is some upside risk here given that starts of single-family homes jumped 9.6 percent during the month. Often, these two series move in the same direction. (Forecast range: 5.50 to 5.85 million-unit rate)

Wednesday

New orders for durable goods should record a 0.6 percent gain in May after a stronger 1.5 percent increase in April. Aircraft orders can skew monthly figures but underlying trends in core components are expected to continue to post modest gains. (Forecast range: -1.0 to 1.0 percent)

Economists expect that new home sales will record a meager 1.1 percent rise in May to a 925,000-unit rate. There is some upside risk here given that starts of single-family homes jumped 9.6 percent during the month. Often, these two series, along with existing home sales, move in the same direction. (Forecast range: 900,000 to 975,000)

Market players will be waiting for the end of the two-day FOMC meeting on Wednesday. The market consensus is looking for no change in the federal funds rate target or the discount rate. Economists also predict that the balance of risk will be maintained at neutral.

Thursday

Economists are predicting that new jobless claims will decline 3,000 in the week ended June 22 from last week’s level of 393,000. Generally, economists associate levels below 400,000 as consistent with moderate gains in nonfarm payrolls. (Forecast range: -7,000 to +2,000)

The consensus forecast shows that real GDP grew at a 5.6 percent rate in the first quarter, unchanged from the Commerce Department’s previous estimate. At the same time, the GDP price deflator is also expected to be unchanged from the previous estimate that showed a 1 percent rate of growth.

Friday

Economists expect that personal income will post a 0.3 percent hike in May, the same as in April, based on the sluggish employment report. (Forecast range: 0.2 to 0.6 percent) At the same time, personal consumption expenditures are expected to remain unchanged in May after gaining 0.5 percent in April. The May drop corresponds to the sluggish retail sales figures and incorporates declines in motor vehicle sales. (Forecast range: -0.4 to 0.4 percent)

The NAPM-Chicago (also known as the PMAC survey) is predicted to decrease to 58 in June from a level of 60.8 in May. Even a slight dip in the index corresponds to expanding manufacturing activity. (Forecast range: 57 to 61)

Economists predict that the University of Michigan’s consumer sentiment index will remain at 90.8 in June, the same level as the mid-month reading. (Forecast range: 90 to 92)