This week’s economic calendar brings us new insight into the health of the manufacturing and housing sectors of the economy. We’ll start off with reports on Capacity Utilization and Industrial Production on Monday. The capacity utilization rate provides an estimate of how much factory capacity is in use. If the utilization rate climbs too high it can lead to inflationary bottlenecks in production. The Federal Reserve watches this report closely and decides how to set interest rates on the basis of whether production constraints are threatening to cause inflation.

Tuesday brings us more housing news with the latest reports on Housing Starts and Building Permits for September. That news will be followed by the release of the Fed’s Beige Book on Wednesday. The Beige Book - which is officially known as the Survey on Current Economic Conditions - contains anecdotal information on the current economic and business conditions.

Thursday we’ll see another round of Initial Jobless Claims. In last week’s report, Initial Jobless Claims rose to 462,000, which was above the 450,000 that was expected. That was a disappointment, as it seems that the economy is unable to string together a couple of solid weeks with Jobless Claims below 450,000. Finally, the week wraps up on Friday with the Philadelphia Fed Index, which is one of the most important regional manufacturing indices.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.