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U.S. consumers have gotten into the holiday spirit. According to the National Retail Federation, holiday sales this year are expected to be up 6% from 2004. That would be a decent performance considering all that consumers have faced during the second half of the year. Holiday sales may also get a boost from last-minute shoppers swarming the malls, as Christmas falls on a Sunday this year. The weekly chain-store sales data will shed light on how the holiday season finished.



Little economic data with major market impact comes out this week. November existing home sales will likely be the most important figures. Now that the housing market appears to have peaked, investors are attempting to gauge how smoothly it will slow.



Figures on consumer confidence should reflect an improved outlook among households. The Conference Board's December gauge of consumer confidence is expected to tick a little higher. The University of Michigan's final consumer sentiment reading for December did better than expected.



Manufacturers have been feeling cheerier as well with demand on the rise. Regional factory activity readings from the Federal Reserve Bank of Richmond and the National Association of Purchasing Management in Chicago will provide an update on how the recent upturn in factory production is progressing. The Richmond report will also provide perspective on the price pressures manufacturers are still facing.



All financial markets will be closed on Monday, Dec. 26, in observance of the Christmas holiday. The bond market will close early on Friday, Dec. 30 in observance of the New Year's holiday.



RICHMOND FED SURVEY



Tuesday, Dec. 27, 10 a.m. EST



The Richmond Federal Reserve Bank will release the December survey of business conditions within its district. The region's manufacturers remained positive, although the composite index eased to 9, from 12 in October.



The shipments index held at 14 for a second straight month, after jumping up to 15 in September, from 8 in August. The new orders index pulled back to 10, from 15 for October. The latest new orders reading is still relatively strong compared to the past 12 months. The overall indication that demand is still growing was bolstered by signs of larger levels of unfilled orders and increased capacity utilization.



Better current conditions appeared to brighten manufacturers' view of the coming six months. The shipments index moved up to 29, from 24 in October and 10 in September. Pricing power remains an issue among manufacturers. Expectations for the next six months showed some improvement. The spread between price increases respondents believe they can pass along to their customers and price hikes manufacturers foresee from suppliers remains negative, although it is expected to narrow.



MORTGAGE APPLICATIONS



Wednesday, Dec. 28, 7 a.m. EST



The Mortgage Bankers Association releases its numbers on mortgage applications for both home buying and refinancing for the week ending Dec. 23. The purchase index eased some more, falling to 453.1, from 477.9 in the week ended Dec. 9, and 495.1 in the week ended Dec. 2. The four-week moving average drifted down to 475.6, from 480.4 in the week ended Dec. 9.



The average rate on a conventional 30-year fixed mortgage edged down a little, according to HSH Associates. For the week ended Dec. 16, the rate was 6.41%, from 6.45% for the week ended December 9.



The MBA's refi index continues to shrink. During the week ended Dec. 16, the index stood at 1418.1, the lowest level since June, 2004. In the week ended Dec. 9, the refi index was 1441.8, down from 1596.4 in the week ended Dec. 2. The four-week moving average declined to 1485.2, from 1526.7 during the week ended Dec. 9.



ICSC-UBS STORE SALES



Wednesday, Dec. 28, 7:45 a.m. EST



This weekly tracking of retail sales, compiled by the International Council of Shopping Centers and UBS bank, will update buying activity for the period ending Dec. 24. Sales rallied with a 2.4% gain during the week ended Dec. 17, after a 0.9% gain in the prior period and a 3.1% drop for the week ended Dec. 3.



INSTINET REDBOOK RESEARCH STORE SALES



Wednesday, Dec. 28, 8:55 a.m. EST



This weekly measure of retail activity will report on sales for the fourth fiscal week of December, ended Dec. 24. In the first three weeks of December, ended Dec. 17, sales were off 0.3% from the same period in November. Sales during November ended up 0.3% better than the month of October.



CONSUMER CONFIDENCE INDEX



Wednesday, Dec. 28, 10 a.m. EST



The Conference Board's December index of consumer confidence probably improved to 102, say economists queried by Action Economics. The November index showed a nice bounce back in confidence, to 98.9. Lower gasoline costs and improved sentiment regarding the labor market have consumers feeling less pessimistic. In October, the index dipped to 85.2, after tumbling to 87.5 in September, from 105.5 in August. Hurricane Katrina and the storm's impact on energy prices caused U.S. households to fret about inflation, economic growth, and the labor market.



JOBLESS CLAIMS



Thursday, Dec. 29, 8:30 a.m. EST



First-time claims for jobless benefits for the week ended Dec. 24 probably edged up to 322,000. That's the consensus among economists queried by Action Economics. Jobless claims eased back to 318,000 for the week ended Dec. 17, from 331,000 in the previous week, and 328,000 over the period ended Dec. 3.



The four-week moving average also declined as well, slowing to 324,500 for the week ended Dec. 17, from 329,250 for the week ended Dec. 10. Continuing jobless claims for the week ended Dec. 10 stood at 2.64 million, from 2.6 million in the week ended Dec. 3.



EXISTING HOME SALES



Thursday, Dec. 29, 10 a.m. EST



Existing home sales most likely cooled to an annual pace of 7 million during November. That's the median forecast from economists surveyed by Action Economics. The National Association of Realtors reported annualized sales of 7.09 million in October and 7.29 million in September. October sales were off across the country, but the sharpest decline was a 7.4% fall in the Northeast.



The supply of existing homes up for sale crept up to 4.9 months, from 4.6 months in September, and 4.7 months in August. The October level of inventories was the highest since mid 2003.



HELP WANTED ADS



Thursday, Dec. 29, 10 a.m. EST



The Conference Board releases its November index of help-wanted ads, based on ads culled from major newspapers across the nation. The national index held at 38 for a third straight month in October. A year ago, the index was at 37.



The percentage of markets with a rising want-ad volume improved to 57%, from 41% in September, and 20% in August. At the same time, help-wanted advertising fell in eight of the nine U.S regions over the three month period through October.



CHICAGO PURCHASING MANAGERS SURVEY



Friday, Dec. 30, 10 a.m. EST



The Chicago-area purchasing managers' index of industrial activity in the Midwest is forecast to have pulled back slightly in December. The consensus estimate among economists queried by Action Economics is for a reading of 60%. The November index level was 61.7%, after hitting 62.9% in October. The September index bounced back to 60.5%, after an August plunge to 49.2%. The new orders and production indexes edged lower in November, although current levels remain quite positive.