The economic indicator calendar pickups up the pace in the March 25 week, closing out the month and the first quarter 2019. The Census Bureau and the Bureau of Economic Analysis continue to catch up on releases delayed by the partial federal government shutdown, but on the whole the data calendar is nearly caught up. In fact, first-tier data is relatively sparse on the schedule. Reports like the ISM indexes and March employment data is not until the following week.
The final estimate for fourth quarter 2018 GDP is at 8:30 ET on Thursday. At this stage the last of the numbers for December are available and there should be little revision from the up 2.6% from the initial estimate (combined advance and second). At this point markets will be far more interested in knowing how the first quarter 2019 is shaping up after the partial federal government shutdown, impacts from severe weather events, and generally slower indicators for growth at the start of the year. Additionally, there is the pesky persistence of “residual seasonality” that seems to mark the first quarter of the year for slower activity.
International trade in goods and services for January is at 8:30 ET on Wednesday and will feed into expectations for the performance of net exports in the first quarter. The Current Account Balance – which is trade plus remittances abroad – at 10:00 ET on Wednesday will be for the fourth quarter 2018. The advance report for international trade in goods, and retail and wholesale inventories for January scheduled for the same day was cancelled.
Personal income and spending at 8:30 ET on Friday will include data on income through February, but only through January for personal consumption expenditures. This means that the calculation for the PCE deflator will continue to lag the CPI by one month. However, everything should be on track by the April release date.
Data on housing starts and permits issued for February at 8:30 ET on Tuesday is also the last on an accelerated schedule for this report and March numbers will be on schedule on April 19. February starts could take a hit from the episode of bitter cold that hit large parts of the Midwest and Northeast early in the month. However, ongoing recovery efforts after the wildfires in California are likely to help the pace of starts in the West. Starts and permits may also reflect that consumers are going to be more motivated to close on an available house (even one yet unbuilt) as long as mortgage interest rates are at favorable levels.
Sales of new single-family homes for February at 10:00 ET on Friday is another report just getting back on track. Sales can be volatile month-to-month, but here, too, the drop in mortgage interest rates from October into February will encourage homebuyers to commit before rates go up again.
The NAR’s Pending Home Sales Index for February at 10:00 ET on Thursday could respond to the same stimulus as purchasers of existing units move to lock in lower rates before prices begin to get competitive again in the spring months.
The FHFA House Price Index and the S&P CoreLogic Case-Shiller Home Price Index at 9:00 ET on Tuesday are for January. Home prices should broadly continue to increase year-over-year, albeit at a less hectic pace than seen in much of the prior two years.
The Conference Board’s Consumer Confidence Index for March at 10:00 ET on Tuesday and the final University of Michigan Consumer Sentiment Index for March at 10:00 ET on Friday are likely to tell a similar story of consumers continuing to regain confidence for a second month after the government shutdown, but at levels less elevated than seen in the past two years. Confidence is robust, just not as giddy as it was in spite of the strong labor market.
The last of the District Bank surveys of manufacturing and services for March will be released over the course of the week.
The Dallas Fed’s Texas Manufacturing Outlook is at 10:30 ET on Monday, the Richmond Fed’s Survey of Manufacturing is at 10:00 ET on Tuesday, and the Kansas City Fed’s Manufacturing Survey is at 11:00 ET on Thursday. Since the abrupt slowdown in activity that first registered in December, the various regional reports suggest that conditions are still expansionary, but less vigorously and more variably. The outlook for six months from now as cooled.
The Philadelphia Fed’s Non-Manufacturing Index is set for 8:30 ET on Tuesday, followed by the Richmond Fed Survey of the Service Sector at 10:00 ET and the Dallas Fed’s Texas Service Sector Outlook at 10:30 ET. January was a hard month for many in the service sector with the government shutdown and February was only a partial rebound in activity. If there is to be further recovery, March should see it completed.
The Federal Reserve will release revisions to its data on industrial production and capacity utilization at 12:00 ET on Wednesday. The Federal Reserve as said, “The Economic Census for 2017 will not be available from the U.S. Census Bureau by early 2019, so no new annual benchmark data will be included for manufacturing. Other annual data, including information on the mining of metallic and nonmetallic minerals (except fuels), will be incorporated. The updated IP indexes will include revisions to the monthly indicator (either product data or input data) and to seasonal factors for each industry. In addition, the estimation methods for some series may be changed. Any modifications to the methods for estimating the output of an industry will affect the index from 1972 to the present.” Thus it should be a big revision.
A number of Fed policymakers will be on the public speaking calendar during the week. They will be out to ensure that the downgrades to the economic outlook in the Fed’s FOMC meeting statement of March 20 and the Summary of Economic Projects are put into perspective of slower – but not absent – growth and an abundance of caution with respect to the risks to the outlook. There will also be efforts to communicate the changes in the plans for the balance sheet as carefully thought-out and in advance to ensure a smooth transition. In particular, appearances by New York Fed President John Williams will get a careful hearing (Thursday at 13:15 ET, Thursday at 14:30 ET, and Friday at 9:25 ET).
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