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Economic signposts to watch this fall

September 05, 2012

| MoneyRates.com Senior Financial Analyst, CFA

As September begins, kids are headed back to school, politicians are hitting the campaign trail and workers are settling back in after the distractions of summer. In other words, it's time to get back to business.

So what type of business conditions will greet Americans this fall? Will inflation continue to behave? Will mortgage refinance rates stay low? Will sales pick up? Will savings accounts finally get a break in the form of higher rates?

The events that may hold the answers

The precise answers to those questions will probably play out over time. But these key economic signposts are likely to help determine them:

  • Federal Reserve Open Market Committee Meeting, September 12-13. OK, this is about a week before fall officially begins, but this meeting will help set the tone for the season to come. Don't expect any radical new policies from the Fed -- they've done about all they can to lower interest rates -- but this meeting is also significant because the Fed will update its official economic projections. Other Fed meetings this fall occur in late October and mid-December.
  • The Employment Situation report, October 5. Forget those week-to-week updates on unemployment claims; what really matters are the monthly tallies of how many jobs were created. The Bureau of Labor Statistics (BLS) releases these reports every month, but the October 5 report will be especially important because it will be the first signal of what the post-summer hiring environment looks like.
  • The Consumer Price Index (CPI) report, October 16. This is another monthly report from the BLS. Moving into fall, it will be especially important to watch the food component of CPI. It is widely believed that this summer's drought will lead to a disappointing harvest, and thus higher food prices. The evidence will start to show up in this fall's CPI reports.
  • The advance estimate of Gross Domestic Product (GDP), October 26. GDP is a broad measure of the nation's economic strength. Real GDP growth weakened in the first quarter of 2012, and again in the second quarter. While the advance estimate is often a little off the mark, this first look at the third quarter's growth will be a key sign of whether the economy is continuing to fade, or starting to rebound.
  • Election day, November 6. Naturally, there are hotly debated views about which presidential candidate would be better for the economy, just as there are contradictory statistics on which party historically has been better for the markets. The best-case scenario? That the markets and business community will respond positively to the reduction in uncertainty that the end of the election should bring.

Don't expect a big change in interest rates this fall, which is good news for mortgage refinance rates, and bad news for savings accounts. Beyond this, though, the signposts above will point the way toward what kind of year 2013 may be -- and whether interest rates are likely to rise before its end.

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