Wednesday, February 06, 2013

Thursday: Weekly Unemployment Claims, Consumer Credit

by Bill McBride on 2/06/2013 07:45:00 PM

The light week for economic data continues ...

I guess we have to start paying attention to the "sequester" negotiations. From the WSJ: Sequester Triggers Delay in Deployment

The Pentagon’s decision to delay the deployment of a carrier to the Middle East could give opponents of the sequester some added ammunition in their battle to undo the across-the-board Pentagon spending cuts.

Sen. Kelly Ayotte (R., N.H.), a member of the Armed Services Committee, called the decision to delay the carrier deployment “deeply disturbing.”

“I hope what has happened here with these very stark examples of how [the sequester] is going to undermine our national security will move people to resolve this,” Ms. Ayotte said. “There are ways forward.”
Cuts totaling $85 billion are scheduled to start March 1 and run through Sept. 30; after that, about $110 billion in annual spending cuts would kick in.
My prediction at the beginning of the year was:
Although the negotiations on the "sequester" will be tough, I suspect something will be worked out (remember the goal is to limit the amount of austerity in 2013).
The only thing that seems certain is that negotiations will go down to the wire. The sequester cuts would be an additional drag on the economy on top of the "fiscal cliff" agreement.

Thursday economic releases:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 360 thousand from 368 thousand last week. The 4-week average could fall to the lowest level since early 2008.

• At 3:00 PM, Consumer Credit for December from the Federal Reserve. The consensus is for credit to increase $14.5 billion in December.