Plenty Of Dollar Data For The Bull (page 3 of 3)

The higher figures not only lend to a higher Chicago report, but also lend to previous speculation of further interest rate hikes by the Federal Reserve. Anticipating inflationary pressures, monetary authorities will more than likely remain cautious as higher rates of manufacturing are indicative of expansion and increasing prices, raising another 25 basis points.

Previous: Area business fell to a reading of 58.5 in the month of January according to the Purchasing Management Association of Chicago. With a reading above 50 suggestive of expansion, the recent report lends to further dollar bullishness as it continues the trend of upticks in consumer spending and growth seen in the first quarter of 2006.

Although narrowing slightly from the 60.8 figure seen in December, the slight dips looks to be negligent as it is representative of underlying lower raw material costs as energy prices thinned out in the month. Subsequently, the other sub-indexes remained in line or slightly lower with the employment component remaining healthy at a 50.2 reading.

With the Chicago area boasting the second largest concentration of factory workers, the report lends to further trader optimism that Federal Reserve officials will be raising rates in March.

U.S. Consumer Confidence (FEB) (15:00 GMT, 10:00 EST)

Consensus: 104.5
Previous: 106.3

Outlook: Consumer confidence in the United States as measured by the Conference Board Index is expected to decline over February as the indicator is predicted to issue a reading of 104.5. The decline in confidence comes after January's increase to the highest level in three years.

Although energy prices began to trend downward at the end of January, consumers feel that the longer term trend in expensive fuel costs will make it difficult to pay home heating bills in spite of low unemployment rates and rising wages. As temperatures were lower than expected in February after a relatively warm January, the cumulative effect of expensive energy will force consumers to tighten their pockets from January.

Even though an index value of 104.5 indicates a decline in confidence from the previous month, the estimated reading is still relatively strong, suggesting that consumer sentiment may serve as a sturdy base for a rebound in spending. If unemployment continues to fall and hourly wages keep on their recent upward trend, consumption in the U.S. economy will be able to spring back from a brief falter at the end of 2005.

Previous: In January, consumer confidence in the U.S. improved for the second straight month when the Conference Board Index climbed to 106.3 from 103.8. This was the highest reading since June of 2002. The largest reason for the jump in the index was the fact that consumers were more optimistic about current conditions, especially employment, than they had been in the previous four years.

While enthusiastic about economic conditions at the time of the survey, consumers did not express optimism in their views of conditions in coming months. In fact, consumer expectations for the future had actually declined on the month as the gap between current and future condition sentiment maintains considerable width. January's overall increase in consumer confidence, however, may be a signal that consumption will rebound in 2006 after spending toward the end of last year fell off significantly.