WASHINGTON (AFX) - US data to be released this week will not provide many meaningful clues on whether the economy has hit bottom and is recovering, Wall Street analysts said.
"This week is quite skimpy with respect to economic data," said the economists at Lehman Brothers in a letter to their clients.
The few statistics that will be released will be closely examined for signs of a turnaround, but most economists are not holding their breaths.
The FOMC meeting on Tuesday "will dominate the week," according to Dana Saporta, economist with Stone & McCarthy Research Associates. All of the economic information that could have an impact on the outcome of the FOMC meeting has already been released, according to Carol Stone, economist at Nomura Securities International.
Since the FOMC last met in late June, it was confirmed the economy grew less than 1.0 pct annualized in the second quarter.
Financial markets are also focused on whether an expected downward revision will push second-quarter GDP growth into negative territory, but this will not be known until Aug 29.
James O'Sullivan, economist at UBS Warburg, said he will be watching weekly jobless claims closely to see if the recent moderation in claims below the 400,000 level continues or was due only to seasonal adjustment difficulties.
If claims stay below 400,000 that would be the fifth week in a row -- suggesting that layoffs may have peaked, said Lynn Reaser, economist at Bank of America Capital Management.
But economists at First Union said optimism about jobless claims was "premature" given the significant lag between when layoffs are announced and when employees actually lose their jobs. "If we are right, jobless claims should soon begin another upward spiral that surpasses their most recent peak of 449,000 claims back on July 7," First Union said in a note to clients.
The following are the consensus forecasts of Wall Street economists to this week's indicators.
JULY LEADING INDICATORS, Monday (10.00 am): The Conference Board's leading indicators index is expected to rise 0.3 pct in July, for its fourth consecutive monthly gain. The index rose 0.3 pct in June. A rise in the index could be construed as a positive sign for the economy, but analysts said the index has lost most of its market impact.
JULY TREASURY BUDGET STATEMENT, Monday (2.00 pm): The government is expected to show a deficit of 3.7 bln usd in July down from a surplus of 5.06 bln in the same month last year. The economic slowdown is reducing tax receipts at the same time that tax rebates are being distributed. The Congressional Budget Office is expected to release its latest budget forecast on Aug 28, showing that the surplus has narrowed to 160 bln usd in the year to Sept 30.
WEEKLY JOBLESS CLAIMS, Thursday (8.30 am): Jobless claims are expected to rise 8,000 to 388,000 in the week Aug 18 after falling 8,000 to 380,000 in the previous week.
JULY DURABLE GOODS, Friday (8.30 am): The consensus forecast of Wall Street economists is for orders for durable goods orders to fall 1.1 pct in July after falling 1.7 pct in June. Some analysts think there may be signs that the weakness in manufacturing is fading.
JULY NEW HOME SALES, Friday (10.00 am): New home sales are expected to slip 0.3 pct to 919,000 in July after rising 1.7 pct to 922,000 in June. "Housing activity remains robust, although sales likely paused in July," said economists at Banc of America Securities.