In a slow week for data, weather (fires in the west, drought in the Southeast), higher oil prices, and lower home sales dominated the business news. A barrel of crude oil sold for over $90 this past week, with a chance that $100 might soon become reality. Home sales were lower but home prices may have started to stabilize. That is less of a negative story than if sales and prices continued to free fall.

The housing market has not hit bottom, nor has the negative fall out on the economy run its course. This coming week will show how strong the economy was, entering the fourth quarter. It will also show whether consumer spending power held up, a key to whether the resilient consumer remains alive and well.

Tuesday, October 30

10:00am Consumer Confidence (The Conference Board)

Continued moderate wage growth and slow but steady job gains bolstered consumer attitudes through September — offsetting the negative impact of paying more for a gallon of gasoline (or a gallon of milk). Were consumer attitudes changed in October?

Wednesday, October 31

8:30am Gross Domestic Product (3Q — 2007) (Bureau of Economic Analysis)

Financial market nervousness at least partly relates to whether housing woes will bring down the overall economy. This first look is likely to show the economy grew by 3 percent (annualized) in the third quarter. That is closer to average growth than to a recessionary pace. Growth in the fourth quarter may not be much weaker than in the third.

8:30am Employment Cost Index (Bureau of Labor Statistics)

These costs rose by 0.9 percent in the second quarter and may have stayed at that pace in the third quarter. Moreover, unless there is a major change in the economic environment, that could be the pace in the fourth quarter as well.

Thursday, November 1

8:30am Personal Income and Outlays (Bureau of Economic Analysis)

Personal income rose by 0.3 percent in August (the last month of the third quarter) and might have been a little faster in October (first month of the fourth quarter). If consumer spending power was maintaining its pace into the early part of the fourth quarter, it is likely that overall activity continued its pace as well.

Friday, November 2

8:30am Employment Situation (Bureau of Labor Statistics)

Over the past three months (July through September) the economy generated close to 100,000 new jobs a month. This is a slow but sustainable pace — unless the overall economy is losing steam. And if the pace of hiring is being maintained so too in all likelihood is the rise in average hourly wages. In short, spending power and job growth likely continued on their current trends through October and into November.

BY THE END OF THE WEEK

Data through September paint a picture of an economy largely shaped by two conflicting headwinds. First and most obvious is the continued concern about the potential fallout from the steep slide in the housing market. But countering that is that the slow but steady pace elsewhere in the economy. That pace is helped by the surge in export demand but largely centers on continued strength, albeit slow, in the consumer sector. If the data this week show a steady pace in spending power and attitudes holding up, the bottom to the story will continue to be that of an economy that is slow but not slowing — as the holiday season draws closer and closer.

Elsewhere in economic news, the price of a barrel of oil remains high and the value of the dollar in international trade remains low. Growth and growth prospects are generally more robust than is true domestically, though the US is not the only country beset by woes in the housing market. Financial markets remain generally positive, perhaps surprisingly so. Finally, the rise in energy costs is beginning to seep into the cost structure and generate concerns about where inflation is headed. Thus while domestically there is speculation about whether interest rates might come down further, elsewhere the concern is about whether rates will rise, and when.