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Focal points for crisis, recovery

By Mark Hamrick ·
Monday, July 15, 2013
Posted 6 am ET

Key reports are due this week involving the retail and housing sectors. The resurgence of consumer and housing activity since the depths of the financial crisis has been a slow grind. Updates on both help to assess where the recovery stands. Along with these reports, there's congressional testimony on tap from Federal Reserve Chairman Ben Bernanke.

Bankrate Audio



Washington Bureau Chief,



National Association of Home Builders



The NPD Group

Consumers fuel gains in both housing and retail sales

A top retail expert says consumers are beginning to splurge again. An update on the continued rebound in the housing market.


Among the events scheduled this week:

  • Fed Chairman Ben Bernanke testifies to House Financial Services Committee, Wednesday at 10 a.m. (all times Eastern)
  • June retail sales report from the Commerce Department, Monday at 8:30 a.m.
  • June consumer price index report from the Labor Department, Tuesday at 8:30 a.m.
  • Builder sentiment reading from the National Association of Home Builders, Tuesday at 10 a.m.
  • June housing starts from the Commerce Department, Wednesday at 8:30 a.m.
  • Fed's Beige Book report Wednesday at 2 p.m.

Spotlight on Bernanke, asset purchases

When Federal Chairman Ben Bernanke spoke to Congress in May, he floated the possibility asset purchases could be scaled back later this year. Since then, there's been a great deal of speculation when that might actually happen. The $85 billion in monthly purchases -- widely known as QE3, short for the third round of quantitative easing -- began last September with the goal of giving the economy momentum and healing the job market.

Lawmakers will have a chance to press the questions surrounding asset purchases again this week. Bernanke begins two days of semiannual testimony on monetary policy before the House Financial Services Committee.

He follows that with a Senate Banking Committee appearance Thursday. Along with the outlook for further asset purchases, it is a good bet that Bernanke's own tenure as chairman will be fodder for a question or two. His term ends in January. President Barack Obama said in a television interview recently that Bernanke "already stayed a lot longer than he wanted or he was supposed to." That seemed to end any thought that Bernanke might be in line for an extension.

While Vice Chair Janet Yellen has been seen as likely successor, there has been a flurry of reports indicating that former Treasury Secretary Larry Summers is interested in the post and might get serious consideration by Obama.

The consumers' pulse

The first report of the week covers June retail sales. The government reported a May gain of 0.6 percent. Jeffrey Rosen, chief economist for, looks for a solid follow-up, helped by improving employment conditions. Says Rosen, "A strong June employment report showcased the biggest one-month increase in aggregate earnings since February, which we expect to result in another month of above-trend retail sales growth."

That's consistent with the longer-term comeback mounted by consumers. Retail expert Marshal Cohen with The NPD Group says, "While we're getting slow growth, it's much healthier than the growth that we've had in the past that was stimulated by other outside influences. This is clearly consumer-driven and consumer-supported." He says such organic growth adds important stability to spending.

Building a foundation in housing

Tandem reports on housing are slated this week, first on the mood among builders and then on new construction, or starts. When the home builders' trade group reported last month on builder confidence, the reading was the strongest since April 2006.

David Crowe, chief economist for the National Association of Home Builders, sees further improvement in the offing. That's despite some challenges. Crowe says, "It's difficult for builders to get enough labor to start new homes. Buyers still have difficulty getting mortgages. But all of those things are slowly, slowly resolving themselves," he adds. Crowe sees "a good future, just not a real sense of rapid growth."

Briefing's Rosen sees some cross-currents at play with housing starts. "We expect the need to increase inventories of new homes will cause a two-month decline in single-family construction to reverse in June," says Rosen. He adds that the "gains, however, may be offset by weaker multifamily starts as that sector cools off following several months of above-trend gains."

This week in business history: Parking meters

One can only guess how much parking meters have collected over the years since the purported first installation of a meter July 16, 1935. It took place in the near-center of the country, in Oklahoma City. The first models accepted coins, which had to be collected. The term "Meter Maid," referencing female parking attendants, was popularized by the Beatles' tune "Lovely Rita."

Smartphone apps have since diminished the need to have coins handy to feed the meters.

Follow me on Twitter @hamrickisms.

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