Key U.S. Data Releases and Events

U.S. economic indicators next week will be relatively light, with February retail sales expected to barely chin the positive bar, the January trade balance showing a slight improvement, but consumer sentiment likely to slide down further in early March.

KEY U.S. DATA RELEASES THIS WEEK

Thursday, March 12 – Retail Sales (Feb.)

Total

• Global Insight: +0.1%
• Consensus: -0.5%
• Last Actual: +1.0% (Jan.)

Less Autos

• Global Insight: +0.5%
• Consensus: -0.2%
• Last Actual: +0.9% (Jan.)

What to Look For

• Retail sales edged up an estimated 0.1% in February.
• Excluding automotive dealers, retail sales likely rose 0.5% from January to February.

Implications

Auto sales were the weak link, as unit sales of light vehicles fell from a seasonally adjusted annual rate of 9.5 million in January to 9.1 million in February. Chain-store sales posted surprisingly strong monthly gains in February, helped by mild weather and an early introduction of spring apparel. Rising gasoline prices pushed up spending at gasoline stations. Nevertheless, consumer spending continues to face fierce headwinds from plunging employment and declining household net worth, so real spending overall is still expected to drop in the first quarter of 2009.

Friday, March 13 – Trade Balance (Jan.)

• Global Insight: -$36.5 Billion
• Consensus: -$38.0 Billion
• Last Actual: -$39.9 Billion (Dec.)

What to Look For

• Trade deficit expected to narrow to $36.5 billion in February, from $39.9 billion in January.

Implications

The biggest factor should be a drop in oil imports, due to both lower prices and lower volumes. Beyond oil, the issue comes down to which falls faster, exports or imports, since both are likely to drop further as the global recession intensifies. We assume declines of roughly 4% in the volumes of both goods exports and goods imports this month (this would reduce the deficit, since imports exceed exports). What is important now, though, is not so much the deficit, but the fact that world trade activity is plunging.

Friday, March 13 – Michigan Consumer Sentiment Index (Preliminary Mar.)

• Global Insight: 55.0
• Consensus: 55.0
• Last Actual: 56.3 (Final Feb.)

What to Look For

• The Reuters/University of Michigan Index of Consumer Sentiment is expected to drop from 56.3 in February to 55.0 in early March.

Implications

The expected level of 55.0 would mark the lowest reading since May 1980. Steep declines in employment and wealth continue to darken views of current and future household finances, suggesting that the retail outlook remains gloomy despite an apparent stabilization in official retail sales figures.