Besides another volatile week in the markets, there was quite a bit of economic news for investors to analyze last week. Housing starts and building permits fell in July signaling continued weakness in the housing market. Consumer prices rose last month because of higher gas and food costs; and industrial production grew by nearly 1 percent in July driven by an increase in auto production. In the week ahead, investors expect reports on GDP, housing, and sentiment.
We’ll gain insight on the economy with the second estimate of second quarter GDP, which looks at all the goods and services produced from April thru June. The first estimate showed the economy grew by 1.3 percent and the first quarter was also revised downward to only 4 tenths of a percent. This was the slowest pace of growth since the recession ended. We’ll get a read on the housing market with the July new home sales report. In June home sales fell 1 percent, but the median price of a new home rose nearly 6 percent to 235 thousand dollars and may signal some stabilization in the housing market.
Are you feeling better about the economy? We’ll find out with the final consumer sentiment report for August. In early August sentiment declined to a 54.9 reading, a level not seen since May 1980 on concerns about the health of the economy. Consumer sentiment is a gauge of consumer spending.