WASHINGTON (AFX) - US economic data to be released this week are expected to show the beginning effects of the Sept 11 terrorist attacks on an already bruised US economy, analysts said.
"Secondary negative effects from the attacks on economic conditions are now underway," said John Youngdahl of Goldman Sachs in New York. Corporations are expected to have well-stocked shelves as demand decreased following the September attacks.
"With the negative shock to demand in the wake of (Sept 11), actual inventories likely swelled; with a weaker-than-expected demand condition, more production cuts will be needed," said Mickey Levy of Banc of America Securities in New York.
Industrial output is likely to continue its steady decline that has occurred over the past year.
"With aggregate hours worked in manufacturing off another 1.2 pct in September and down almost 9 pct in the past year, another decline in production was likely recorded in the month," Levy said adding, "with household and business demand further suppressed by the terrorist attacks, further inventory adjustment -- with several additional months of production declines -- is likely."
Housing starts are expected to decline after having fallen the month prior to the lowest level in nearly a year.
The Consumer Price Index (CPI) is expected to rise 0.3 pct, following a four times larger-than-expected 0.4 pct rise in the producer price index for September, but analysts said inflation should not be a concern as the increases came primarily from energy prices. The core rate is expected to increase a modest 0.2 pct.
"Anticipate a relatively friendly inflation report, with an easing in energy prices and significant price discounting on various goods and services ranging from cars to apparel to airfares," said Lynn Reaser of Banc of America Capital Management in St. Louis. Following are the consensus forecasts of Wall Street economists for data to be released next week.
AUGUST BUSINESS INVENTORIES, Today (8.30 am): Economists expect business inventories to have declined 0.2 pct in August after they fell 0.4 pct in July, the sixth monthly decline in inventories.
SEPTEMBER INDUSTRIAL PRODUCTION, Tuesday (9.15 am): Economists forecast that September industrial output has fallen 0.7 pct after declining 0.8 pct in August, the eleventh consecutive decline in industrial output.
SEPTEMBER HOUSING STARTS, Wednesday (8.30 am): Housing starts for September are expected to have fallen 2.0 pct to 1.496 mln units in September after falling 6.9 pct to 1.527 mln units in August. The August level is the lowest level of monthly housing starts since October 2000.
GREENSPAN TESTIMONY, Wednesday (10.00 am): Federal Reserve Board Chairman Alan Greenspan is scheduled to testify on monetary policy and the US economic outlook before the Joint Economic Committee of Congress.
WEEKLY JOBLESS CLAIMS, Thursday (8.30 am): Forecasts indicate that weekly initial claims for regular state unemployment benefits for the week ended Oct 13 rose by 12,000 to a seasonally adjusted 480,000 after claims dropped 67,000 to 468,000 for the week ended Oct 6.
SEPTEMBER CONSUMER PRICE INDEX, Friday (8.30 am): Economists say that consumer prices rose 0.3 pct in September while the core rate, which excludes food and energy prices, is also expected to rise 0.2 pct. Headline consumer prices rose 0.1 pct while the core rate rose 0.2 pct in August.
AUGUST TRADE DEFICIT, Friday (8.30 am): Economists expect the August trade deficit to have narrowed to 28.7 bln usd in August after it was reported at 28.8 bln usd in July.