Thursday, December 19, 2013

Friday: Q3 GDP, State Employment, Kansas City Fed Mfg

by Bill McBride on 12/19/2013 08:24:00 PM

Here we go again, from the LA Times: Lew warns Congress debt limit must be raised no later than early March

Treasury will be able to use so-called extraordinary measures to extend the nation's borrowing ability until "late February or early March," Lew wrote in a letter to House and Senate leaders.
"The creditworthiness of the United States is an essential underpinning of our strength as a nation; it is not a bargaining chip to be used for partisan political ends," Lew wrote.
If Congress passes a budget with a deficit, the amount borrowed will have to increase.

We have a budget. The budget has a deficit (although the deficit has been declining rapidly). The deficit has to be borrowed to pay the bills.  The smart move would be to eliminate the so-called "debt ceiling".  It is solely for political posturing.

My prediction: The bills will be paid (debt ceiling increased), with no material concessions.

• At 8:30 AM, Q3 GDP (third estimate). This is the third estimate of Q3 GDP from the BEA. The consensus is that real GDP increased 3.6% annualized in Q3, unchanged from the second estimate.

• At 10:00 AM, Regional and State Employment and Unemployment (Monthly) for November 2013.

• At 11:00 AM, the Kansas City Fed manufacturing survey for December.