Markets & Finance

Vital Signs: Maximum Stress for the Economy


On deck: March updates on retail sales, consumer and producer price indexes, housing starts, industrial production, plus more company earnings

This week's big round of economic reports for March will help economists put the finishing touches on their expectations for first-quarter economic growth. The data will also help shape growth expectations for the current quarter.

The government will issue its first estimate of real gross domestic product on Apr. 30. Right now, most economists are betting the first quarter’s growth rate was essentially zero, with about equal chances of a fractional minus or plus. That performance would follow the fourth quarter’s slim 0.6% advance.

That’s hardly an obvious recession scenario. However, economists’ are taking a much more downbeat view of the second quarter. Many now expect growth in real GDP in the current quarter to turn decidedly negative. This will be a period of maximum stress for the economy this year.

Consumers are already reeling from costlier energy, falling home prices, and tighter credit. Now household income is taking a hit from shrinking payrolls and rising unemployment. Falling payrolls means businesses are also showing more signs of caution, and they're pulling back on their outlays for new equipment and construction. This quarter, the economy appears to be losing a big chunk of the support to overall demand that consumers and businesses had been providing up to now.

The coming week’s data will help to assess just how much momentum the economy was losing as it headed into the second quarter. Monday’s report on March retail sales will be especially crucial in that regard. March measures of consumer confidence collapsed amid dire news from the financial markets and downbeat headlines about the labor markets. March sales will show whether consumers are making equally dramatic cutbacks in their spending.

March industrial production will be scrutinized for two things: The extent to which exports are buoying manufacturing output and the degree to which production of business equipment is holding up. Those are key indicators of capital spending.

Other important indicators that will help economists assess the current path of GDP will be business inventories and housing starts. Rising inventories could be a sign that stocks are piling up in the face of weakening demand, a scenario that could lead to more cutbacks in output and jobs in the second quarter. Housing starts are expected to post another decline, with no sign that the housing drag is lessening in the current quarter.

Also, watch for fresh readings on producer and consumer prices, especially coming in the same week when several Federal Reserve policymakers will be speaking. Philadelphia Fed President Plosser, who dissented against the size of the Fed’s latest rate cut, will be speaking on the goals of monetary policy. Fed Vice Chairman Kohn will discuss credit market issues, while both Richmond Fed President Lacker and Boston Fed President Rosengren will speak on market liquidity and systemic risk.

Here’s the weekly economic calendar, from Action Economics.

Top Reports for the coming week

Top Reports

Date

Time

For

Median Estimate

Last Period

Retail Sales

Monday, April 14

8:30 a.m.

March

0.1%

-0.6%

Retail Sales (ex autos)

Monday, April 14

8:30 a.m.

March

0.2%

-0.2%

Business Inventories

Monday, April 14

10:00 a.m.

February

0.3%

0.8%

Producer Price Index

Tuesday, April 15

8:30 a.m.

March

0.4%

0.3%

Producer Price Index (ex food and energy)

Tuesday, April 15

8:30 a.m.

March

0.2%

0.5%

Empire State Index

Tuesday, April 15

8:30 a.m.

April

-15.1

-22.2

Consumer Price Index

Wednesday, April 16

8:30 a.m.

March

0.4%

0.0%

Consumer Price Index (ex food and energy)

Wednesday, April 16

8:30 a.m.

March

0.2%

0.0%

Housing Starts (Mln)

Wednesday, April 16

8:30 a.m.

March

1.029

1.065

Industrial Production

Wednesday, April 16

9:15 a.m.

March

-0.1%

-0.5%

Capacity Utilization Rate

Wednesday, April 16

9:15 a.m.

March

80.2%

80.4%

Philadelphia Fed Index

Thursday, April 17

10:00 a.m.

April

-13.8

-17.4

Leading Indicators Index

Thursday, April 17

10:00 a.m.

March

-0.1%

-0.3%

Other events

Reports

Date

Time

For

SPEECH: Fed Governor Warsh

Monday, April 14

2:30 p.m.

Treasury International Capital Report

Tuesday, April 15

9:00 a.m.

February

Home Builders Survey

Tuesday, April 15

1:00 p.m.

April

Johnson Redbook Weekly Store Sales

Tuesday, April 15

8:55 a.m.

Apr. 13-19

ICSC-UBS Store Sales

Tuesday, April 15

7:45 a.m.

Apr. 13-19

Mortgage Applications

Wednesday, April 16

7:00 a.m.

Apr. 13-19

SPEECH: San Fran. Fed President Yellen

Wednesday, April 16

11:45 a.m.

SPEECH: Philadelphia Fed President Plosser

Wednesday, April 16

12:30 p.m.

Federal Reserve Beige Book

Wednesday, April 16

2:00 p.m.

SPEECH: Fed Vice Chairman Kohn

Thursday, April 17

9:45 a.m.

SPEECH: Richmond Fed President Lacker

Friday, April 18

8:30 a.m.

SPEECH: Boston Fed President Rosengren

Friday, April 18

8:30 a.m.

Earnings Reports

Company

Date

Eaton Corp

Monday, April 14

WW Grainger

Monday, April 14

CSX

Tuesday, April 15

Forest Labs

Tuesday, April 15

Intel

Tuesday, April 15

Johnson & Johnson

Tuesday, April 15

Linear Technology

Tuesday, April 15

M&T Bank

Tuesday, April 15

Marshall & Ilsley

Tuesday, April 15

Northern Trust

Tuesday, April 15

Regions Financial

Tuesday, April 15

State Steet

Tuesday, April 15

U.S. Bancorp

Tuesday, April 15

Washington Mutual

Tuesday, April 15

Abbott Labs

Wednesday, April 16

Altera

Wednesday, April 16

Coca-Cola

Wednesday, April 16

eBay

Wednesday, April 16

IBM

Wednesday, April 16

Illinois Tool Works

Wednesday, April 16

J.P. Morgan Chase

Wednesday, April 16

Legget & Platt

Wednesday, April 16

SLM Corp

Wednesday, April 16

St. Jude Medical

Wednesday, April 16

Torchmark

Wednesday, April 16

Wells Fargo

Wednesday, April 16

Advanced Micro Devices

Thursday, April 17

Bank of New York Mellon

Thursday, April 17

Baxter International

Thursday, April 17

BB&T

Thursday, April 17

Capital One Financial

Thursday, April 17

CIT GroupComerica

Thursday, April 17

Danaher

Thursday, April 17

E*Trade Financial

Thursday, April 17

First Horizon National

Thursday, April 17

Genuine Parts

Thursday, April 17

Google

Thursday, April 17

Harley-Davidson

Thursday, April 17

IMS Health

Thursday, April 17

International Game Technology

Thursday, April 17

Keycorp

Thursday, April 17

Marriott International

Thursday, April 17

Merrill Lynch

Thursday, April 17

New York Times

Thursday, April 17

Nucor

Thursday, April 17

Pfizer

Thursday, April 17

PNC Financial Services Group

Thursday, April 17

PPG Industries

Thursday, April 17

Southwest Airlines

Thursday, April 17

Stryker

Thursday, April 17

SUPERVALU

Thursday, April 17

Textron

Thursday, April 17

United Technologies

Thursday, April 17

Zions Bancorporation

Thursday, April 17

Caterpillar

Friday, April 18

Citigroup

Friday, April 18

Honeywell International

Friday, April 18

Schlumberger

Friday, April 18

Wachovia

Friday, April 18

Xerox

Friday, April 18


Toyota's Hydrogen Man
LIMITED-TIME OFFER SUBSCRIBE NOW

Sponsored Financial Commentaries

Sponsored Links

Buy a link now!

 
blog comments powered by Disqus