WASHINGTON (Thomson Financial) - The following is a synopsis of US economic indicators to be released in the coming week, with forecasts compiled by Thomson’s IFR Markets.
The week will be heavy with indicators, with Q1 GDP and the employment report among the most closely watched. On Wednesday, the Federal Open Market Committee will release its monetary policy statement.
TUESDAY, APRIL 29
Consumer Confidence for April is expected to dip to 62.0 from 64.5 in the previous month.
"The deteriorating employment situation is likely to weigh heavily on confidence, as two out of the five questions in the survey focus specifically on employment," economists from Credit Suisse said. "Another factor contributing to the decline is the rising price at the gas pump, up 0.17 usd per gallon so far this month," they added.
WEDNESDAY, APRIL 30
Employment cost in the first quarter is expected to stay at 0.8 pct. The Commerce Department will also release the advance figure for GDP in the first quarter, which is expected to grow 0.3 pct following 0.6 pct growth in the previous quarter.
Offsetting a decline in final sales, is a significant increase in inventories, what economists from Lehman Brothers say is likely unintentional: "corporations were seemingly surprised by the cooling off in demand and have inadvertently allowed inventories to accumulate."
"Bear in mind, though, that estimating the first iteration of GDP for a quarter is a difficult task, particularly with the inventory component potentially being a large swing factor," warned Joseph Brusuelas of IDEAglobal.
The core PCE price index for the first quarter is expected to increase to 2.7 pct from 2.5 pct.
The Chicago Purchasing Managers Index is expected to have dipped to 47.5 from 48.2. Economists from Barclays Capital say last month’s PMI index seemed overdone, and this month’s PMI will fall "more in line with the smoother downtrend in national manufacturing conditions."
THURSDAY, MAY 1
Personal income in March is expected to have increased 0.3 pct, less than the 0.5 pct it increased in the previous month. Economists from Barclays Capital said income will have been boosted by moderate gains in earnings and hours worked.
Meanwhile, consumption in the month is expected to have increased 0.3 pct, an improvement from last month’s 0.1 pct increase. "Although motor vehicle sales were mixed this month, with a sharp drop in truck sales and a moderate increase in car sales, core retail sales grew modestly, and higher gas prices should buoy sales at gasoline stations," Barclays Capital economists said.
The core PCE price index, the Federal Reserve’s preferred measure of inflation, is expected to have increased 0.2 pct in March following a 0.1 pct increase in the previous month. Core PCE in the year ending in March is expected to have increased 2.0 pct, the same year-over-year change as in the previous month.
Economists from Barclays Capital said the modest rise in the core PCE price index is "due to notable weakness in medical care prices, which receive a larger weight in this index than in the Consumer Price Index."
Per usual on Thursdays, the Labor Department will release its weekly jobless claims numbers. The number of individuals filing first-time claims for unemployment in the week ending April 26, are expected to have increased to 360,000 from 342,000 in the previous week. "The initial claims data should resume its upward trend after an unexpected decline to 342,000 in the previous week," said Joseph Brusuelas of IDEAglobal.
The number of individuals who continued to file claims for unemployment insurance in the week ending April 19, is expected to have increased to 2.950 mln from 2.934 mln. "The continuing claims data is still consistent with a upward march in the rate of unemployment that should crest at around 5.5 pct later this year," Brusuelas said.
The ISM manufacturing index is expected to have dipped in March to 48.0 from 48.6. "Regional purchasing managers’ indices have been mixed as evidenced with the Empire State index rising 23 points while the Phily Fed index registered its fifth consecutive monthly contraction reading," said Wachovia economists. "This mixed picture suggests little change in the national headline index," they added.
Construction spending in March is expected to have dipped 0.9 pct following a 0.3 pct decline in the previous month.
FRIDAY, MAY 2
The US is expected to lose 75,000 jobs in April, following a loss of 80,000 jobs in the previous month. The unemployment rate in April is expected to increase to 5.2 pct from 5.1 pct in the previous month.
"During the sampling period, just about every reliable indicator of activity in the labor sector pointed to further declines in the non-farm payroll report for the month," Brusuelas said. "We expect that continued stress in the manufacturing, goods producing and construction sectors should be the primary catalyst for more bloodletting in April."
Factory orders in March are expected to have increased 0.3 pct following a 1.3 pct decline in the previous month. Excluding transportation, factory orders are expected to have increased 2.0 pct following a 1.8 pct decline in the previous month.
Economists from Barclays Capitals noted that durable good orders dropped 0.3 pct in the month, "mostly owing to a sharp decline in motor vehicle orders that was likely related to the ongoing American Axle strike." But offsetting that weakness will be a moderate climb in nondurable goods orders, "lifted by surging commodity prices," the economists said.
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