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Update – Look Forward: Week of December 24, 2018

Update: The federal government went into partial shutdown on December 22. Congress is out of session for the holiday. Lawmakers will not return until Thursday. It looks like both sides are preparing for an extended fight. As far as the release of economic data report, the effects of the shutdown will not be much felt in the December 24 week. Data released during the Christmas to New Year’s period often gets scant attention and usually isn’t that important to determining the overall economic outlook.

 In fact, there will not be much to disturb markets until Friday, January 4 when the December Employment Situation fails to make an appearance. The BLS survey period closed out on December 14. The data usually takes about three weeks to process. Even with the threat of a shutdown looming, the BLS will not have had sufficient time to prepare the numbers, nor will it have enough time to play catch up even if the government reopens on Wednesday, January 2.

 The federal government agencies that prepare the data will issue new release calendars as soon as they are able. Past experience suggests that in the event of a prolonged closure, data release calendars will remain disrupted for some weeks.  In some instances, the agencies will abandon releasing the next report due and then double up for the subsequent month.

 Adding to the confusion, this is the time of year when agencies are setting up to report annual revisions. Quite often the January data is accompanied by revisions to prior years. It may make is a little more difficult to forecast and digest the data when it finally is released.

The final week of the year tends to be one of the sleepiest and 2018 is no exception. Fed officials are absent from the public engagement calendar, government offices are on skeleton staffs, and Congress is in recess. There are no major economic data reports scheduled for Monday (Christmas Eve) and there are early closes for the stock market (13:00 ET) and bond market (14:00 ET). Tuesday is a full government holiday. It may prove to be an even quieter week than originally anticipated if the federal government goes into partial shutdown, as seems probable at this writing. Congress is unlikely to return to session next week even to address the budget impasse with President Trump. That means none of the federal government economic data would be released at least until the following week.

Until there is an official announcement, a few economic reports are due out of government news lockups. Nonetheless, most of the reports are actually from regional and/or private
sources. So, shutdown or no, there will be some economic data.

Sales of new single-family homes in November at 10:00 ET on Thursday could remain about on trend for an under 600,000 reading after rising mortgage interest rates and limited supplies cut into activity in recent months. The NAR’s Pending Home Sales Index for November at 10:00 ET on Friday is not expected to signal any pick up for contracts signed.

Wednesday will see the S&P Corelogic Case-Shiller Home Price Index for October at 9:00 ET. The FHFA House Price Index for October is scheduled for 9:00 ET on Thursday. Both are expected to show home prices continue to climb, albeit at a less brisk pace.

Initial jobless claims for the week ended December 22 at 8:30 ET on Thursday are anticipated to remain in the low 200,000’s with relatively fewer end-of-year layoffs to add to the rolls. The seasonal adjustment is such at it is possible there could be a short-live dip below the 200,000-mark.

The Conference Board’s Consumer Confidence Index for December at 10:00 ET on Thursday should come in above the 135.7 of November. If nothing else, consumer usually respond to lower gasoline prices with a burst of confidence in the present situation.

The MNI-Chicago Purchasing Managers Business Barometer for December at 9:45 ET on Friday is the final piece of regional data about conditions for this year except for the Dallas Fed’s Texas Manufacturing Outlook at 10:30 ET on Monday, December 31. It remains to be seen if the Chicago survey – which includes both manufacturing and service sector respondents – falls in line with the weaker tone of the regional data.

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