The Business News Week Ahead

A week filled with inflation data gets rolling on Wednesday with the consumer price report where any unexpected pressure in the core rate could reflame rate-hike concerns. Wednesday also sees January retail sales and though a soft headline is the call, a seventh straight month of solid strength is expected for the ex-auto reading. Producer prices, which have shown pressure in recent months, will open Thursday's data followed by the industrial production report where manufacturing has been showing surprisingly little lift. Friday's data include import and export prices, which outside of petroleum have been flat, and also housing starts where permits have been on the rise. Note also there will be two overlooked reports worth tracking, the Treasury International Capital report on Thursday and the latest on foreign demand for U.S. securities and e-commerce sales on Friday for the latest on the web's share of the retail sector.

Monday

Treasury Budget for January

Consensus Forecast: -$51.0 billion

Consensus Range: -$29.0 billion to -$57.0 billion

The Treasury budget for January will offer the first data on the effects of this year's tax cut. The Econoday consensus is calling for a sizable deficit of $51.0 billion.

Tuesday

Small Business Optimism Index for January

Consensus Forecast: 105.8

Consensus Range: 105.0 to 107.0

Forecasters are calling for a bounce back in the small business optimism index which fell sharply in December on a falloff in confidence and plans to draw down inventories. Econoday's call for January is 105.8 vs December's 104.9.

Wednesday

Consumer Price Index for January

Consensus Forecast, Month-to-Month Change: 0.3%

Consensus Range: 0.3% to 0.4%

Consumer Price Index

Consensus Forecast, Year-on-Year Change: 2.0%

Consensus Range: 1.9% to 2.3%

CPI Core, Less Food & Energy

Consensus Forecast, Month-to-Month Change: 0.2%

Consensus Range: 0.1% to 0.3%

CPI Core, Less Food & Energy

Consensus Forecast, Year-on-Year Change: 1.7%

Consensus Range: 1.7% to 2.0%

Inflation may be under new scrutiny but one place it has been hard to find is in consumer prices. And not much price traction is expected to appear in January's report with the core rate (less food & energy) seen up a modest 0.2 percent with the year-on-year expected to fall 1 tenth to 1.7 percent. The consensus for the headline CPI is a gain of 0.3 percent for a yearly rate that is also down 1 tenth, at 2.0 percent.

Retail Sales for January

Consensus Forecast: 0.3%

Consensus Range: 0.0% to 0.5%

Retail Sales Ex-Autos

Consensus Forecast: 0.5%

Consensus Range: 0.1% to 0.8%

Retail Sales Ex-Autos Ex-Gas

Consensus Forecast: 0.4%

Consensus Range: 0.2% to 0.5%

Retail Sales Control Group (Ex-Food Services, Ex-Autos, Ex-Gas, Ex-Building Materials)

Consensus Forecast: 0.4%

Consensus Range: 0.2% to 0.5%

Unit auto sales proved very weak which is expected to hold down January's retail sales gain to a moderate 0.3 percent. When excluding autos, however, sales are expected to show a seventh month of solid strength, at a consensus gain of 0.5 percent. When excluding autos and also gasoline, where higher prices are a positive for the month, sales are expected to rise 0.4 percent. When also excluding food services and building materials, control group sales are likewise expected to come in at a 0.4 percent gain.

Business Inventories for December

Consensus Forecast,  Month-to-Month Change: 0.2%

Consensus Range: -0.3% to 0.4%

Forecasters are calling for a modest 0.2 percent build for December business inventories, data that will be an input into the second estimate for fourth-quarter GDP.

Thursday

Empire State Index for February

Consensus Forecast: 17.5

Consensus Range: 13.0 to 18.0

The Empire State index pulled back in January to what was still a very strong rate of growth. Though growth for most of January's readings slowed including shipments and employment, price data showed acceleration including expectations for future costs and future selling prices. After 17.7 in January, the consensus for February is 17.5.

Initial Jobless Claims for February 10 week

Consensus Forecast: 229,000

Consensus Range: 225,000 to 230,000

Initial claims are expected to come in at 229,000 in the February 10 week compared to 221,000 in the January 27 week

when the 4-week average, at 224,500, hit a 45-year low. Low levels of claims are consistent with minimal layoffs and strong demand for labor.

Philadelphia Fed Manufacturing Index for February

Consensus Forecast: 21.5

Consensus Range: 19.0 to 24.7

Like Empire State, slight slowing at a still a strong rate of growth was January's result for the Philly Fed manufacturing index which is expected to hold steady in February at a consensus 21.5. Shipments, the workweek and employment have been climbing sharply and are raising questions over the sample's capacity constraints.

PPI-FD for January

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

Consensus Range: 0.3% to 0.4%

PPI-FD Less Food & Energy

Consensus Forecast, Month-to-Month Change: 0.2%

Consensus Range: 0.1% to 0.3%

PPI-FD Less Food, Energy, & Trade Services

Consensus Forecast, Month-to-Month Change: 0.2%

Consensus Range: 0.2% to 0.3%

Producer prices did show pressure toward the end of last year but not in December when they fell an unexpected 0.1 percent at the headline level on a pullback in service costs. Forecasters are looking for a snap back in January to a gain of 0.4 percent. Less food and energy is seen up 0.2 percent with less food, energy and trade services also expected to rise 0.2 percent.

Industrial Production for January

Consensus Forecast, Month-to-Month Change: 0.2%

Consensus Range: -0.3% to 0.5%

Manufacturing Production

Consensus Forecast,  Month-to-Month Change: 0.2%

Consensus Range: -0.1% to 0.3%

Capacity Utilization Rate

Consensus Forecast: 78.0%

Consensus Range: 77.7% to 78.2%

The manufacturing component of this report has been an anomaly, showing a long trend of marginal growth against a full year of record readings in regional and private samples and now sharp acceleration underway for actual factory orders and shipments. And yet manufacturing hours were down in the January employment report and have forecasters calling for another weak month of production in this report, at a consensus January gain of only 0.2 percent following a 0.1 percent gain in December. The report's two other components, mining and utilities, have been mixed with the former showing strong growth but the latter up and down on weather-related demand. Taken all together, the consensus gain for January industrial production is, like that for manufacturing, 0.2 percent with total capacity utilization seen rising 1 tenth to 78.0 percent.

Housing Market Index for February

Consensus Forecast: 72

Consensus Range: 70 to 73 

Visible improvement in customer traffic has been giving a boost to the housing market index which is near expansion highs. Sales readings in this report, both current and expectations, have been very strong and accelerating and have correctly signaled the upturn underway for new home sales. Econoday's February consensus calls for steady strength, unchanged at 72.

Friday

Housing Starts for January

Consensus Forecast, Annualized Rate: 1.230 million

Consensus Range: 1.210 to 1.305 million

Building Permits

Consensus Forecast: 1.300 million

Consensus Range: 1.260 to 1.320 million

A sharp fall in single-family starts drove total housing starts down sharply in a December report that otherwise showed strength for multi-family starts and especially for single-family permits. The consensus for January housing starts is for a strong snap back to a 1.230 million annualized rate vs 1.192 million in December with housing permits seen at a 1.300 million rate which would be unchanged from December's revised result (1.302 million initially reported).

Import Prices for January

Consensus Forecast, Month-to-Month Change: 0.6%

Consensus Range: 0.3% to 0.6%

Export Prices

Consensus Forecast, Month-to-Month Change: 0.3%

Consensus Range: 0.2% to 0.3%

Import prices have shown pressure in recent months but not when excluding petroleum where readings have been flat. December's results were weak throughout including for export prices. Tangible improvement is the call for January where the consensus for import prices is a gain of 0.6 percent and 0.3 percent for export prices.

Consumer Sentiment Index, Preliminary February

Consensus Forecast: 95.5

Consensus Range: 94.0 to 96.5

Consumer sentiment index recovered from a preliminary January slump to end the month at 95.7 and about where it was in December. This report has been flat unlike the consumer confidence index where readings have been much higher. Econoday's consensus for the preliminary February consumer sentiment index is 95.5 in a result that would point to no measurable panic tied to the stock market.