Preview: Confidence, home prices, GDP, ASA staffing, FOMC minutes
(1) The Conference Board probably fell again in Nov. That would match the pattern in other measures in early Nov. (2) Home prices have turned upward since Q2, probably reflecting strength in underlying demand, a temporary boost from the homebuyer tax credit, a mix-shift away from sales of distressed homes, and some boost from seasonal factors. However, price indicators began to soften in Aug and Sept. We forecast a small decline in the FHFA home price measure in Sept (UBSe -0.2%, cons +0.1%). However, the S&P/Case Shiller composite 20 measure probably rose (UBSe 0.2%m/m, -9.6%y/y, cons -9.1%y/y, after -11.4%y/y): It tends to lag other price measures partly because it is based on three-month averages; the Sept reading will reflect transactions in Jul, Aug and Sept. (3) We estimate that Q3 real GDP growth will be revised down by 0.7 point to a +2.8% annual rate. Much of the weakening (-0.6pt) reflects more strength in imports than was first assumed. Also, consumer spending and business structures will likely be revised down marginally. We expect little change in the inventories component. The rapid inventory liquidation through Q3 suggests that they will contribute to growth in Q4 and 2010. Profits likely surged on a Q/Q basis but remained down Y/Y. (4) ICSC and Redbook measures for early Nov were mixed: The ICSC measure has slipped slightly w/w and stalled m/m, but the Redbook measure continued to rise. (5) The American Staffing Association (ASA) will release their temporary staffing index (week of Nov 9-15) on Tuesday before noon. It has risen for nine consecutive weeks on a not seasonally adjusted basis. The acceleration, after adjustment for seasonal patterns, suggests a further pick-up in reported monthly temp payrolls, which tend to lead total employment. (6) Nov 3-4 FOMC meeting minutes will be released, including updated central tendency projections by FOMC members.