@ The White House
At noon, the President will receive the Presidential Daily Briefing in the Oval Office. Later, the President will meet with senior advisors.
@ Wall Street
January?s super jobs Employment Report capped off a week of mostly positive economic news. Construction spending, helped by good weather, posted solid across-the-board gains in December. Auto sales, also aided by good weather, started the New Year with a bang, as seasonally adjusted sales rose to their highest level in 29 months.
The January ISM manufacturing index improved to its best level since June, while its non-manufacturing counterpart reached its highest level since February. And personal income in December posted its strongest increase in nine months.
As always, there were some rough spots. Real consumer spending was flat in December. Home prices in November were down in 19 of the 20 cities that Case-Shiller tracks. And in a good-news-bad-news update, the slowdown in productivity growth continued into the fourth quarter (bad news) as firms were finding it harder to squeeze much more out of their existing workforce?likely forcing them to step up hiring (good news).
The Fed remains cautious on the outlook, as explained by Fed chairman Ben Bernanke who went before the House Budget Committee to present the picture behind the Fed's extension of its exceptionally-low rates pledge through late 2014.
Bernanke was speaking before the strong January jobs report, and though recent Fed statements have left the door wide open for further quantitative easing this year, if we get more jobs reports like that, the door will close.
To no surprise, Bernanke also urged Congress to tackle the long-term budget deficit problem but without moving too abruptly and impeding the recovery.
On the data front, the upcoming week will be a quiet one. We are highlighting only two releases, both coming out on Friday. We are expecting a widening of the trade deficit in December on rising imports of consumer goods and autos. And we are projecting a slight uptick in consumer sentiment for mid-February on better economic news.