GDP leads off week's economic calendar

The first look at 2Q GDP out on Friday will likely be the week's top economic report in what is shaping up to be an average number of reports this week.

Gross Domestic Product contracted at a steep pace in 4Q08 and again in 1Q09 as consumer spending fell sharply and business spending receded.

Since March, business inventories have been on a downward path and industrial production has weakened, but we've seen some stability in consumer spending and exports have picked up modestly.

Economic data have been showing signs of stabilizing and most economists anticipate another drop in GDP, but according to Bloomberg, a small 0.7% annualized decline is anticipated.

New home sales for June will be released on Monday, providing the latest snapshot at the troubled housing industry. Builders have been facing stiff competition from foreclosures and the glut of homes on the market but have also been plagued by cancellations, as homeowners still face difficulty unloading their current properties.

But sales have been relatively stable over the past four months and have found support from the $8,000 new home buyers tax credit and historically low interest rates. Economists expect sales to rise 2.3%.

Though rising sales would definitely be a plus for the construction market, new home sales make up less than 10% of total sales so the focus remains on existing home sales.

Other releases to look for include consumer confidence on Tuesday, durable goods on Wednesday, jobless claims on Thursday, and the Chicago PMI on Friday.