The Business News Week Ahead

The week ends on Friday in style with the first estimate for third-quarter GDP, but it also includes durable goods orders on Wednesday which is a report where strength may be building from within. Housing will be the week's sector theme including new home sales on Wednesday, a report that has been soft, and pending sales of existing homes on Thursday, a report that has been very soft. Advance data on net export and inventories along with jobless claims could make for bumps on Thursday. For GDP, Econoday's consensus is a solid 2.5 percent.

Monday

National Activity Index for September

Consensus Forecast: -0.10

Consensus Range: -1.70 to 0.09

Hurricanes scrambled September's economic data pointing to uncertain results for the national activity index. Employment was sharply mixed with payrolls posting a rare decline while at the same time the unemployment rate and wage data showed strength. Retail sales soared on replacement demand for vehicles while the manufacturing component of the industrial production report posted no better than a marginal increase. Forecasters see national activity coming in at minus 0.10 in September vs minus 0.31 in August though the range of estimates is wide, from minus 1.70 to plus 0.09.

Tuesday

PMI Composite for October, Flash

Consensus Forecast: 54.8

Consensus Range: 54.3 to 55.1

PMI Manufacturing for October, Flash

Consensus Forecast: 53.4

Consensus Range: 52.7 to 54.0

PMI Services for October, Flash

Consensus Forecast: 55.2

Consensus Range: 54.9 to 55.6

Markit Economics' set of U..S. indicators was mixed in September but continued to indicate solid overall growth. The composite index slowed 5 tenths to 54.8, a level that is comfortably above breakeven 50. The services PMI has been the leading strength though this index did slow to 55.3 in September with Econoday's October call at 55.2.  The manufacturing PMI, in sharp contrast to other private data on the factory sector, has been the soft, coming in at 53.1 in September with forecasters looking for 53.4 in October's flash. The composite index is expected to hold unchanged at 54.8.

Richmond Fed Manufacturing Index for October

Consensus Forecast: 20

Consensus Range: 15 to 20

Like other regional surveys, the Richmond Fed's manufacturing index has been running at unusually strong levels. September's 6 point jump to 19 easily beat Econoday's high estimate with the report's details showing robust levels for shipments and extended strength for hiring. The October consensus is for a 1 point rise to 20.

Wednesday

Durable Goods Orders for September

Consensus Forecast, Month-to-Month Change: 1.0%

Consensus Range: 0.3% to 2.3%

Durable Goods Orders, Ex-Transportation

Consensus Forecast: 0.5%

Consensus Range: 0.1% to 1.0%

Durable Goods Orders, Core Capital Goods (Nondefense Ex-Aircraft)

Consensus Forecast: 0.5%

Consensus Range: 0.0% to 0.6%

Durable goods growth has been steady and moderate with one special highlight and that's improvement for capital goods. Vehicles were another a highlight of the August report with replacement demand a possible key plus for September. Econoday's consensus for durable goods orders is a 1.0 percent gain on top of August's 2.0 percent jump. Ex-transportation orders are seen up 0.5 percent with core capital goods orders also up 0.5 percent.

FHFA House Price Index for August

Consensus Forecast, Month-to-Month Change: 0.4%

Consensus Range: 0.1% to 0.5%

Appreciation in home prices has been perhaps this year's best economic story, running at roughly a 6 percent annual rate and giving an important lift to household wealth. Yet appreciation has been slowing in recent months in line with weakness in home sales. The FHFA house price index managed only a 0.2 percent monthly gain in July with the rate expected to rise to 0.4 percent in August.

New Home Sales for September

Consensus Forecast, Annualized Rate: 555,000

Consensus Range: 540,000 to 590,000

New home sales have been the leading strength of the nation's housing sector despite slowing steadily through the year. Hurricane effects were evident in the South during August though other regions also declined. A positive in the data was a rise in supply which has been low and limiting buyer choices and sales along with it. Completions of single-family homes were up in September which will be a plus for this report. The consensus for September new home sales is for a 555,000 annualized rate vs 560,000 in August.

Thursday

International Trade In Goods for September

Consensus Forecast, Month-to-Month Change: -$64.0 billion

Consensus Range: -$65.6 to -$63.0 billion

The goods deficit in September is expected to widen to a consensus $64.0 vs $63.3 billion in August ($62.9 billion initially reported). Exports of consumer goods and vehicles as well as capital goods posted solid gains in August. Also released with the report will be advance September data for both wholesale inventories and retail inventories which, like net exports, are also GDP inputs.

Initial Jobless Claims for October 21 week

Consensus Forecast: 235,000

Consensus Range: 230,000 to 240,000

Hurricane effects have completely eased from initial jobless claims which hit a 44-year low in the prior week at 222,000. Yet Puerto Rico is still an unknown given low levels of claims still coming out of the territory. The consensus call for the October 21 week, at 235,000, sees only a limited increase and no major Puerto Rican effect.

Pending Home Sales Index for September

Consensus Forecast, Month-to-Month Change: 0.5%

Consensus Range: -1.9% to 1.9%

Pending sales, which track initial contract signings for resales, have been accurately forecasting this year's steady weakness in the existing home sales report where final sales are tracked. Weakness in August pending sales included the hurricane-hit South but other regions were soft as well. After August's surprisingly sharp 2.6 percent drop, the Econoday consensus for the September pending sales index is a gain of 0.5 percent.

Friday

Real GDP: 3rd Quarter, 1st Estimate, Annualized Rate

Consensus Forecast: 2.5%

Consensus Range: 1.9% to 2.9%

Real Consumer Spending, Annualized Rate

Consensus Forecast: 2.2%

Consensus Range: 1.8% to 2.7%

GDP Price Index

Consensus Forecast: 1.6%

Consensus Range: 1.5% to 1.9%

Third-quarter GDP is expected to slow to a still respectable 2.5 percent annualized rate from the second quarter's very solid 3.1 percent. Consumer spending, seen at 2.2 percent vs 3.3 percent in the prior quarter, was mixed in the third quarter but will get a lift from vehicle replacement demand following Hurricanes Harvey and Irma. Business investment appeared solid but could soften from prior strength with net exports likely to contribute to growth. The GDP price index is seen rising to a 1.6 percent rate vs 1.0 percent in the second quarter.

Consumer Sentiment Index, Final October

Consensus Forecast: 101.1

Consensus Range: 98.0 to  103.5

The consumer sentiment index burst higher in mid-month October to 101.1 for the best showing in 13 years. Full employment is a main factor boosting confidence while low rates of inflation are helping purchasing power. Inflation readings in this report have been unusually weak, at only 2.3 percent for the year-ahead outlook. Despite a wide range of estimates, Econoday's consensus is for no change in final October, at 101.1.