This week will be full of economic news with several critical data releases and Fed Chairman Bernanke’s semi-annual Humphrey Hawkins testimony before both chambers of Congress. In today’s data, personal spending in January rose only 0.2% versus expectations of 0.4%, while personal incomes rose a stronger than expected 1.0%.
The Institute for Supply Management-Chicago Inc. said today its business barometer for the manufacturing sector rose to 71.2 from 68.8 in January. This is the highest level since July 1988. Recall that a number greater than 50 signals expansion. On Thursday this week, we will see the gauge for the non-manufacturing sector which covers nearly 90% of the U.S. economy, and will tell us if the economic recovery is broad based.
The week will be capped off by the February labor reports including the official unemployment rate and the monthly change in non-farm payrolls. The unemployment rate is estimated to increase from 9.00% to 9.10% and payrolls are expected to increase by 179,000.
Of course the events in the Middle East and North Africa continue to be a focus for the stock and bond markets as does the brewing clash between Republicans and Democrats over a continuing resolution for the budget. A resolution must be passed by Friday, March 4th, lest the government shut down.
Bond prices are flat from the close on Friday as are mortgage prices.
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