Vital Signs: Softer Forecasts for Fourth-Quarter Growth

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MEETING OF NOTE

Monday, Feb. 26, 9:50 a.m. EST - Federal Reserve Board Governor Susan Schmidt Bies speaks about Basel II at the Global Association of Risk Professionals' 8th annual conference in New York City.

ICSC-UBS STORE SALES - Tuesday, Feb. 27, 7:45 a.m. EST

This weekly tracking of retail sales, compiled by the International Council of Shopping Centers and UBS bank, will update buying activity for the period ending Feb. 24. Weekly sales for the period ended Feb. 17 slipped 0.1%, after falling 0.8% in the prior period. The increase from a year ago slowed to 3.5%, from 3.9% in the prior week.

DURABLE GOODS ORDERS - Tuesday, Feb. 27, 8:30 a.m. EST

New orders for durable goods are expected to largely give back the gains seen in December. According to economists queried by Action Economics, orders likely fell 2.8%.

In December, orders grew 2.9%, after a 2.2% rise in November December figures, which appeared to show that manufacturing was on the mend, may have been a head fake. A retreat in the January new orders index from the Institute for Supply Management's national factory activity report, along with a 0.7% drop in manufacturing output and some February regional factory activity surveys point to continued weakness in manufacturing.

Inventory figures will carry some added importance. Business inventory growth came to a halt during the fourth quarter. The January durable goods figures will shed some light on how comfortable manufacturers feel about their inventory levels now.

JOHNSON REDBOOK INDEX - Tuesday, Feb. 27, 8:55 a.m. EST

This weekly measure of retail activity will report on sales for the third fiscal week of February, ended Feb. 24. During the first two fiscal weeks, ended Feb. 17, sales were off 1.2% from the same period in January. For the entire month of January, sales were up 1.7% from December.

CONSUMER CONFIDENCE INDEX - Tuesday, Feb. 27, 10 a.m. EST

The Conference Board's February monthly index of consumer confidence is expected to stay virtually unchanged. The January index improved to 110.3, from 110 in December, and 105.3 in November. In the January results, the present situations component jumped to 133.9, from 130.5 in December. At the same time, the future expectations reading for January fell to 94.5, from 96.3.

The brighter outlook regarding current conditions revolves around improved attitudes over the labor market and business conditions. The percentage of respondents who said that jobs were "plentiful" hit 29.9%, the highest level since August of 2001. Meanwhile, the percentage who said that current business conditions were good improved to 28.1, from 27.4 in December.

EXISTING HOME SALES - Tuesday, Feb. 27, 10 a.m. EST

Existing homes are expected to have held virtually unchanged. Sales edged down to an annual pace of 6.22 million in December, from 6.27 million in November, and 6.24 million in October. Fourth-quarter sales were the weakest in three and a half years. Sales in December were off 7.9% from a year ago, with single-family home sales down a slightly smaller 7.2% from a year ago.

The weakness in sales over the past year has kept a lid on prices. The median price for single-family homes stood at $221,600 in December, unchanged from a year ago. The median price of condominiums nationally at $227,000 was nearly unchanged from December of 2005 as well.

There is some good news for sellers. Despite slower sales, inventory levels are gradually receding. The months supply of single-family homes is 6.5 months, from a recent high of 7.2 months in October. Among condominiums, the months supply was 8.5 months, from a recent high if 9.3 months in October.

RICHMOND FED SURVEY - Tuesday, Feb. 27, 10 a.m. EST

The Richmond Federal Reserve Bank issues its regional survey of business conditions for February. The composite reading worsened in January, to -11. A negative result implies a contraction in factory output across the area. The shipments and new orders reading fell further into negative territory, while the backlog orders and employment indexes remained negative but held steady from the December levels.

Looking ahead to the next six months, respondents were more upbeat. The shipments reading bounced back to 45 in January, from 30 in December. The new orders, backlog of orders, and employment indexes were also improved from December. The capital expenditures reading inched up to 25, from 24 in the previous period. The results go along with economists' general expectation that manufacturing is going through a rough patch resulting from a buildup in inventories and weakness in housing and autos, but that conditions will improve in the near future.

MEETING OF NOTE

Wednesday, Feb. 28, 7 a.m. EST - Federal Reserve Bank of New York President Timothy Geithner talks about liquidity and financial markets at the Global Association of Risk Professionals' 8th annual conference in New York City.

MORTGAGE APPLICATIONS - Wednesday, Feb. 28, 7 a.m. EST

The Mortgage Bankers Association issues its weekly mortgage application volume data for home buying and refinancing activity during the week ending Feb. 23. In the latest week, both the purchase and refi indexes dropped.

For the week ended Feb. 16, the purchase index eased to 381.4, from 400.7 in each of the prior two weeks. The refi index was 1921.1, down from 2031.7 in the week ended Feb. 9.

The four-week moving averages for the purchase index moved a little lower. The index was 398.7 for the week ended Feb. 16, from 404 for the week ended Feb. 9. The four-week average for the refi index stood at 1959.1, from 1941.

The average 30-year fixed-rate mortgage backed down to 6.19%, from 6.24% in the week ended Feb. 9.