Key US Data Releases and Events

A quiet US week. It was much quieter after last week’s “one-two punch” of FOMC and employment reports. Federal Reserve members are currently moving toward a decision on further stimulus, but there was little new information this week to guide them. Labor productivity returned to growth in the second quarter, as a modest increase in output was achieved with miniscule growth in hours. Maxing out the efficiency of the existing workforce would typically encourage firms to boost hiring, but we expect production and job growth to stay sluggish for the remainder of the year. The US trade gap narrowed in June, as lower oil prices cut imports and exports managed a decent gain. But the improvement in overall exports masked pockets of weakness that speak to the slowdown in global demand. Nevertheless, net trade will now likely be a positive for GDP growth in the second quarter, as opposed to the drag that was initially reported.

Retail sales, inflation, and housing starts on tap. The data calendar picks up this coming week, starting with the July retail sales report. After three months of contraction, sales are expected to post a modest gain. Spending numbers are not signaling recession, but households are increasingly cautious in their spending plans. CPI inflation likely got a modest boost from rising food and gasoline prices in July, with steady core inflation kept in line by weak demand and well-anchored inflation expectations. Housing starts likely inched higher in July, with gains on the multifamily side. Most signs point to a nascent housing recovery, albeit a slow and uneven one.

Tuesday, August 14 – Producer Price Index (Jul.)

Total

• IHS Global Insight: 0.6%
• Consensus: 0.2%
• Last Actual: 0.1% (Jun.)

Core

• IHS Global Insight: 0.1%
• Consensus: 0.2%
• Last Actual: 0.2% (Jun.)

What to Look For

• Producer prices will climb 0.6%, egged on by higher energy prices

Implications

The PPI likely climb 0.6% in July as energy prices switched from a minus to a plus. But core PPI gains remain mired at just 0.1%. A small bump from food prices could be felt soon, unless the weather improves.

Tuesday, August 14 – Retail Sales (Jul.)

Total

• IHS Global Insight: 0.3%
• Consensus: 0.3%
• Last Actual: -0.5% (Jun.)

Less Autos

• IHS Global Insight: 0.4%
• Consensus: 0.3%
• Last Actual: -0.4% (Jun.)

What to Look For

• Growth after three months of decline

Implications

Retail sales likely expanded 0.3% in July for the first time since March, even though light-vehicle unit sales fell. Other retail sales categories were likely above water, after a dismal second quarter.

Wednesday, August 15 – Consumer Price Index (Jul.)

Total

• IHS Global Insight: 0.2%
• Consensus: 0.2%
• Last Actual: 0.0% (Jun.)

Core

• IHS Global Insight: 0.2%
• Consensus: 0.2%
• Last Actual: 0.2% (Jun.)

What to Look For

• Modest CPI inflation as gasoline and food prices start to climb

Implications

CPI inflation is expected to register 0.2% for July. After a flat CPI reading in June, consumer energy prices are on the rise. Core CPI inflation was likely a moderate 0.2%, the same as last month.

Wednesday, August 15 – Industrial Production (Jul.)

Industrial Production

• IHS Global Insight: 0.7%
• Consensus: 0.5%
• Last Actual: 0.4% (Jun.)

Capacity Utilization

• IHS Global Insight: 79.3%
• Consensus: 79.2%
• Last Actual: 78.9% (Jun.)

What to Look For

• Robust gains in industrial production, fueled mainly by autos and electricity

Implications

Industrial production is expected to have surged 0.7% in July. Electricity output likely climbed 2.5% due to the warmer-than-normal weather. Vehicle production likely spiked 4.0% on abnormally short plant shutdowns. Elsewhere, manufacturing output is seen posting more modest gains.

Thursday, August 16 – Housing Starts (Jul.)

Housing Starts

• IHS Global Insight: 0.766 Mil.
• Consensus: 0.758 Mil.
• Last Actual: 0.760 Mil. (Jun.)

Building Permits

• IHS Global Insight: 0.775 Mil.
• Consensus: 0.765 Mil.
• Last Actual: 0.755 Mil. (Jun.)

What to Look For

• An increase in starts, due to improved multifamily construction

Implications

Housing starts are expected to have inched up 0.8% to 766,000 in July. This forecast incorporates a 5% increase in multifamily starts and a small 1% decline in single-family starts. 

Friday, August 17 – Reuters/University of Michigan Consumer Sentiment Index (August, Preliminary)

• IHS Global Insight: 71.2
• Consensus: 72.3
• Last Actual: 72.3 (Jul.)

What to Look For

• Mild deterioration in sentiment

Implications

The Reuters/University of Michigan’s consumer sentiment index is expected to have fallen 1.1 points, to 71.2, in an early-August reading. Better-than-expected jobs numbers were probably not enough to offset the impact of rising food and gasoline prices on sentiment.

by Nigel Gault and Paul Edelstein