1. As basic costs rise, spending slows
With consumers facing red-hot prices for food and fuel, some inevitably are cutting back on trips to the mall, casting an icy chill over spring fashions. A fresh look comes Thursday, with February retail sales. Economist Nigel Gault of Global Insight says the report will show a tiny gain of 0.1 percent “and will not alter the picture of an economy that already has slipped into recession. Real spending definitely has stalled.”
2. Boeing’s appeal deadline approaches
For Boeing Co., Tuesday is the deadline for a decision on whether it will appeal a $35 billion Air Force tanker contract awarded to the parent of European rival Airbus SAS, along with Northrop Grumman Corp. Congressional leaders howled that the decision was a slap at U.S. workers and said they might not fund it.
3. Gold grows more precious in price
The soaring cost of bling ranks right along with groceries and gasoline for consumers. They can’t help wondering whether this will be the week that gold tops $1,000 an ounce. It topped $995 last week, a record and above levels last seen in the ’80s.
4. Cost pressures to get close scrutiny
Rising costs will be in the spotlight Friday, when the Labor Department reports last month’s consumer price index. Analysts are looking for a less torrid pace, after the January report showed a whopping increase of 0.4 percent, or 0.3 percent when food and energy are excluded. Pressures were felt from rising costs for apparel, medical care, education and tobacco.
5. Fed’s balancing act on rates continues
The question for the Federal Reserve is how far it can cut interest rates without causing a further collapse of the dollar. Policymakers meet in eight days. “Look for the Fed to cut by 50 basis points,” or a half-percentage point, to 2.5 percent, says William Knapp, investment strategist with MainStay Investments, a unit of New York Life. He says financial markets “seem to be validating an aggressive Fed move.”
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wsluis@tribune.com
