With OPEC Meeting Looming, and Emerging Markets Growing, Oil Prices May Only be Temporary
Sep 8th, 2008 | By William Patalon III | Category: Financial News, Politics & EconomicsEconomically Speaking
If it’s not one thing, it’s another. Just when the one-time frightening inflation picture began to ease up a tad (on declining commodities prices), a few key reports caused investors to sour on the economy’s prospects for future growth. The retail picture remained bleak and back-to-school discounts did nothing to lure consumers back into the malls. Same-store sales in August were softer than expected, with only discounters like Wal-Mart Stores Inc. (WMT) posted promising results. Mall clothiers like Abercrombie & Fitch & Co. (ANF), department stores like J.C. Penney Co. Inc. (JCP), and luxury retailers like Nordstrom Inc. (JWN) each struggled from lackluster activity in August.
Of course, many consumers remained concerned about their jobs, as the unemployment rate soared to 6.1%, the highest level in almost five years. Additionally, over 80,000 non-farm jobs were lost in August, bringing the total for the year to about 550,000 vanished jobs. August represented the eighth consecutive month of a declining labor market. Meanwhile, the housing sector is showing no signs of rebounding, as construction spending fell for the 16th straight month. A total of 9% of borrowers were reported as either delinquent on their mortgages or already in foreclosure.
On a positive note, the services sector surprisingly expanded in August, the first such showing in three months. The U.S. central bank’s Beige Book confirmed what most everyone already knew: The U.S. economy is slowing across most regions, but falling commodities may bring some inflation relief. Both the European Central Bank (ECB) and the Bank of England chose to leave their short-term rates unchanged, removing some pressure from the Federal Reserve here in the United States to raise its Federal Funds rate in the near future.
Weekly Economic Calendar
| Date | Release | Comments |
| September 1 | Labor Day | Market Holiday |
| September 2 | Construction Spending (07/08) | Lowest level in activity in 7 years |
| ISM – Manu (08/08) | Revealed no real sector expansion or contraction | |
| September 3 | Factory Orders (7/08) | 5th consecutive increase in orders |
| Fed Beige Book | Slower growth, but with some relief from inflation | |
| September 4 | Initial Jobless Claims (08/30/08) | Surprising increase in weekly claims |
| ISM – Services (08/08 | Slight sector expansion | |
| September 5 | Unemployment Rate (08/08) | Highest level since September 2003 |
| Nonfarm Payroll Additions (08/08) | More jobs lost in August than expected | |
| The Week Ahead | ||
| September 8 | Consumer Credit (07/08) | |
| September 11 | Initial Jobless Claims (08/6/08) | |
| Balance of Trade (07/08) | ||
| September 12 | PPI (08/08) | |
| Retail Sales (08/08) |
Source: With OPEC Meeting Looming, and Emerging Markets Growing, Oil Prices May Only be Temporary
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William (Bill) Patalon III is the Managing Editor and Senior Research Analyst for Money Morning, and is also the Managing Editor for The Money Map Report. Patalon's work has appeared in Kiplinger's personal finance magazine, USA Today, and The South China Morning Post, among other publications.
