Today's Economic Data Highlights

The heavy flow of data begins with the trade balance and producer prices in addition to unemployment claims.  Later in the day, we hear again from the Fed….
 
8:30: The US trade balance for Aug…will it stall after last month’s sharp narrowing?  The answer to this question is important for gauging how much US real GDP grew in the third quarter.  One argument for a much larger increase than the 1.5% annualized gain we are estimating is that the trade balance will reverse a large part of the huge 3.5-point second-quarter drag.  For this to happen, this report should show another significant narrowing—e.g., to $40bn or less.  In fact, most economists expect a widening, and our best shot is that the trade balance narrowed only slightly in August.
Median forecast (of 75) -$44bn, ranging from -$40n to -$47.5bn; last -$42.8bn.
 
8:30: Producer price index for Sep…another energy-led increase? We expect energy price increases (lack of seasonal weakness) to dominate an otherwise benign report on producer prices.  Other estimates are consistent with our view on core, but they range all over the map on headline.
On headline, GS: +0.2%; median forecast (of 74): +0.1%, ranging from -0.4% to +1.0%; last +0.4%.
On core, GS: +0.1%; median forecast (of 72): +0.1%, ranging from -0.1% to +0.3%, last +0.1%.
 
8:30: Unemployment insurance claims….still range-bound?  Nobody expects much of a change in initial jobless claims as the labor market appears to be stuck in the mud.  The bias on continuing claims remains toward slightly lower numbers.  None of the figures to be released today covers the reference week for the establishment survey.
For initial claims, median forecast (of 47): 445k, ranging from 425k to 455k; last 445k.
For continuing claims, median forecast (of 13): 4.45 million, ranging from 4.4mm to 4.49mm; last 4.462mm.
 
16:30: Federal Reserve balance sheet….The size of the Fed’s balance sheet remains around $2.3 trillion as repayments of principal on agency debt and MBS is now being reinvested into US Treasuries.  This shift will show up slowly over time, as the amounts per week are in the $3-$4bn neighborhood.
 
17:00: Minneapolis Fed President Narajana Kocherlakota speaks at a payments conference…in Bloomington, MN.  The topic of the conference suggests more of a focus on systemic or regulatory issues rather than the economic outlook or monetary policy, but it’s possible Mr. Kocherlakota will find a way to weigh in about QE2.  His last comments in London, in late September, suggested that his resistance had waned in the wake of disappointments in the data.

From Goldman Sachs

Comments

[trav7777]

all I know is a bag of chips is now $4.

I am not seeing any manifestations of deflation

[CPL]

Canuck buck is going for broke again on a 10-15% premium on all currency trades.

This is not going to end well...again.

[Jason T]

My favorite news piece from Fed official:  The U.S. Federal Reserve has made clear it will not monetize federal budget deficits by printing money, a senior U.S. Federal Reserve official said on Thursday.

http://www.reuters.com/article/idUSTRE63D4NC20100415

[Dagny Taggart]

Note the specific wording: The U.S. Federal Reserve has made clear it will not monetize federal budget deficits by printing money, a senior U.S. Federal Reserve official said on Thursday. Duh! They do it all electronically now.

[French Frog]

for a split second i believed this was fresh news but then i realised that "anymore" was missing at the end of the first sentence

[Jason T]

I should have included..news from April.

[dryam]

I promise!, I will not cum.

[French Frog]

does the data really matter when 'bad' data is systemically ignored?

[bada boom]

Proof is in the pudding...

It's all good until you find grandma's fingernail.

[CPL]

threw up a little in my mouth there

[Moonrajah]

16:30: Federal Reserve balance sheet….The size of the Fed’s balance sheet remains around $2.3 trillion as repayments of principal on agency debt and MBS is now being reinvested into US Treasuries.  This shift will show up slowly over time, as the amounts per week are in the $3-$4bn neighborhood.

So by Thanksgiving the Fed will overtake China as the largest holder of USTs. After that the whole 'don't fuck with your largest creditor' argument will suddenly become much more omnious.

[papaswamp]

Eeeek! NSA UE number jumped by 75,000

[daniel]

Really this is a great post from an expert and thank you very much for sharing this valuable information with us.
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