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Where’s the economy headed? This is a good week to find out.

A wide array of financial indicators come out between now and Friday afternoon.
 
Several important economic indicators come out this week, including national job numbers on Friday.
Several important economic indicators come out this week, including national job numbers on Friday. [ CHARLES KRUPA | AP ]
Published Oct. 29, 2019

This is a big week for assessing the economy. Several of the most important indicators of the country’s financial health get released, everything from interest rates to job figures.

Does the long expansion have more legs? Is it merely slowing down or is exhaustion setting in? We should have a better idea by Friday afternoon.

The onslaught of data starts Tuesday with national home sales and the consumer confidence index, which measures attitudes about current and future economic conditions. Both are noteworthy, but the big news should start Wednesday morning.

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That’s when the latest estimate on the gross domestic product comes out. The measure of the country’s total output will likely show that the economy slowed down in July, August and September. The forecasts are for growth of 1.5 percent to 1.8 percent, down from 2 percent earlier in the year. If the number comes in a lot higher, expect stock markets to jump.

Later that day, in what may be the most anticipated announcement of the week, the Federal Reserve is expected to lower interest rates by a quarter of a percentage point. That’s what the experts think will happen, and the stock markets appear to have the rate cut already baked in. It would be the third cut since July.

After the September cut, Federal Reserve Board Chairman Jerome Powell signaled that another cut was possible. But Powell and the other members of the fed sometimes buck the consensus. They zig when everyone expects a zag. At last month’s meeting, several members suggested they weren’t eager to cut rates again. It’s possible they will decide to keep rates the same and wait until their meeting in December to get a better handle on economic conditions.

Cutting what’s called the “federal funds rate” stimulates the economy by encouraging investing and borrowing. But it’s a balancing act. Lowering rates too much can cause unwanted inflation — a quick rise in prices. Also, lower them too much now and the fed won’t have as much ammunition to juice the economy if things tank later on.

On Thursday, consumer spending figures come out, which measure a significant part of what drives the economy. They are expected to tick up, despite indications that Americans are growing wary of their economic future.

Income data also gets released Thursday. It rose in August, but most people didn’t spend the little extra they earned. They put it in savings instead.

Friday is another big day, led by the national jobs report. Most economists forecast that employers added fewer than 100,000 new jobs in October, down from 136,000 in September, which was solid, if unspectacular. Bank of America Merrill Lynch economists were even less optimistic. They forecast only 25,000 new jobs, thanks to the strike at General Motors, which led to the loss of up to 200,000 workers from the car maker and related companies.

The unemployment rate hit 3.5 percent in September, a 50-year low. It’s expected to remain at that level or tick up slightly in October.

Later on Friday comes a look at American manufacturing, which went into a tailspin in September. The sector shrank even more than expected, with the main index falling to a 10-year low. The October numbers should be better but not by much, according to forecasts.

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On top of all that, more than 1,000 publicly traded companies release their financial statements this week, including 146 in the S&P 500. The list includes big names like AT&T, General Motors, Apple, Facebook and Exxon Mobil. If these companies report strong earnings, that bodes well for the economy. If not, expect more fears of a slowdown.

This could be a wild week. Stay tuned.