Investors will have a considerable amount of economic data to react to this coming week as attention shifts to how the new economic information will impact Federal Reserve policy decisions about the timeline of a rate hike.
The dominant economic report that is expected to sway the market will come on Friday when the U.S. Labor Department releases their employment report for July. Fed Committee members take employment data seriously when weighing monetary policy.
Other economic reports varying from manufacturing, personal spending, private payroll growth, and inflation will also have some influence over investor sentiment this week about the state of the economy.
Last Wednesday, the Federal Reserve wrapped up their 2 day July policy meeting and released a statement that made no direct reference to the timing of an interest rate hike. It is believed that Fed Committee members are still waiting for more economic data to confirm whether the U.S. economy is in strong enough shape to sustain an interest rate hike in September or December.
Last Thursday, the Commerce Department released an advanced 2nd quarter U.S. GDP report that showed the U.S. economy grew solidly at 2.3 percent in the second quarter of 2015 while first quarter GDP was revised higher from -0.2 to + 0.6 percent.
However, on Friday the Employment Cost Index, a predictor of core inflation, showed that labor costs rose only 0.2 percent in the 2nd quarter of 2015, the weakest increase since 1982.
This week more inflation data will be reported on Monday from the Bureau of Economic Analysis with PCE prices for the month of June. Economists from briefing.com forecast an increase of 0.2 percent in June.
The report includes a section covering personal consumption expenditures that is reviewed closely by Fed Committee members concerning the progress of inflation which has shown some weakness in 2015.
On Monday personal income and personal spending for June will also be reported along with the ISM index, construction spending, and auto sales.
President Obama will also be unveiling a final climate change plan on Monday that is believed to address tougher measures to fight carbon pollution. A brief plan glimpse of the plan was launched over the week-end on Facebook in a White House video.
On Friday the Labor Department releases the non-farm payroll report for July. Economists from briefing.com forecast 235,000 jobs were added to the economy in July after 223,000 were added in June.
Full Economic Calendar
Personal Income and Personal Spending (June)
PCE Prices-Core (June)
ISM Index (July), Construction Spending (June), Auto/Truck Sales (July)
Factory Orders (June)
ADP Employment Report (July). Forecast is for 240,000 from briefing.com.
ISM Services (July)
MBA Mortgage Index, Crude Inventories
Initial and Continuing Jobless Claims, Natural Gas Inventories
Non-farm payroll report for July from the Department of Labor
Consumer Credit (June)