OVERNIGHT MONEY: Economic growth could show meager progress

ADVERTISEMENT
The summer, so far, hasn't been kind to President Obama's reelection campaign, which is fending off a big drop in job growth and persistently high unemployment. 

Still, the Commerce Department figures could provide a clearer picture of economic growth, or lack thereof, during the past several years. 

Zandi expects the most recent revisions to show that the recession was more severe and the recovery a bit stronger than currently estimated.  

"This would a positive sign," he said. 

He also expects personal saving to be revised higher, which would mean consumers have more "financial firepower" to use in the coming months, as the November election draws closer. 

As usual, expect the latest figure to be watched closely by investors and policymakers who will have one eye cast toward the Federal Reserve. 

With each bit of disappointing data on the economy, the speculation over whether the central bank will step into the fray has gotten louder, and media reports that the Fed is prepping for action if the economy continues to stall have been gasoline on the embers. 

Publicly, Fed Chairman Ben Bernanke has kept a measured tone on the matter — refusing to rule out future action, but not promising it either. 

Many will be watching the new GDP numbers to see if they will push the Fed in any particular direction when it meets to adjust policy next Tuesday and Wednesday.

WHAT ELSE TO WATCH FOR

Let's make a last-minute deal: Senate Majority Leader Harry Reid (D-Nev.) suggested Thursday that his chamber could act on a slew of expired or expiring tax breaks — commonly known as tax extenders — before lawmakers skip town next week.

"Hopefully, we can do that, even get a bill before we leave here for the August recess," Reid said at a news conference.

Later, when asked about the Senate's September plans, Reid said, "We'll see what happens on the tax extenders this next 10 days."

Senate Finance Committee Chairman Max Baucus (D-Mont.) has been holding meetings with panel members from both sides of the aisle to try to come together on a tax extender agreement, but many tax observers don't expect a final deal on the issue until at least the lame-duck session of Congress. 

House Republicans are several months into a review of the targeted tax provisions, dozens of which expired at the end of last year. Some GOP lawmakers have said that policymakers also need to examine how or if to phase out certain extenders, like a tax credit that helps the wind industry.

Trading up: With the Capitol quiet on Friday there are a couple of trade events to fill the day. The Washington International Trade Association will gather up some experts to discuss what is happening with free trade agreements. Meanwhile, the Henry L. Stimson Center will chat about the Trans-Pacific Partnership vs. China-Japan-Korea FTA and the implications for Taiwan with Chen-Dong Tso, a visiting fellow at the Stimson Center and associate professor in political science at National Taiwan University.

LOOSE CHANGE

Going down: Potential homebuyers lined up fewer contracts to purchase previously owned home in June as the housing market tries to build some momentum. 

Pending home resales decreased 1.4 percent after a revised 5.4 percent gain in May, the National Association of Realtors showed Thursday. 

How low can you go: The average rate on 30-year fixed mortgages fell again last week, dropping below 3.5 percent for the first time on records that date back 60 years.

Well, that's a little better: Applications for first-time jobless benefits dropped by 35,000 to 353,000, the Labor Department said. 

ECONOMIC INDICATORS 

Michigan Sentiment: Thomson Reuters/University of Michigan will release its final measure of consumer sentiment for July. Consumer confidence has been slipping along with the economic slowdown. 

WHAT YOU MIGHT HAVE MISSED

— Geithner: Criminal charges possible in Libor scandal

— Dereg bill passes with all its typos fixed

— GOP cuts to Social Security budget would increase wasteful spending

— Momentum builds for short-term farm bill

— House, Senate leaders urge fast action on Russia trade

— Not clear when House will vote on Russia bill: trade panel head

— House panel easily approves Russia trade bill

— At-risk Senate Democrats introduce bill to extend current estate tax levels

— Outlook for egg bill appears dim

— Democrats say Romney beholden to ‘Big Oil’

Catch us on Twitter: @VickoftheHill, @peteschroeder, @elwasson and @berniebecker3

For tips and feedback email vneedham@thehill.com