The Business News Week Ahead

Inflation will be the week's special focus beginning on Tuesday with the consumer price report where any pressures at the core level could retrigger market concerns for a fourth rate hike this year. Keeping the inflation focus will be two reports that have shown increasing traction: producer prices on Wednesday followed on Thursday by import and export prices. The week's data get rolling on Monday with the Treasury statement for February where attention will be on both individual and corporate receipts and the unfolding effects of this year's tax cut. Consumer spending has been soft in recent months and February's retail sales report, where strength is the call, will be Wednesday's highlight. The week ends with key data on the housing sector, starts and permits, and also on the factory sector and whether the manufacturing component of the industrial production will finally show some life.

Monday

Treasury Budget for February

Consensus Forecast: -$216.0 billion

Consensus Range: -$230.0 billion to -$200.0 billion

The Treasury budget for February will offer early indications on the effects of this year's tax cut. The Econoday consensus is calling for a monthly deficit of $216.0 billion.

Tuesday

Small Business Optimism Index for February

Consensus Forecast: 107.1

Consensus Range: 105.5 to 107.6

Forecasters are calling for further acceleration in the small business optimism index which rose sharply in January on strength in earnings trends and optimism over expansion plans. Econoday's call for February is 107.1 vs January's 106.9.

Consumer Price Index for February

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

Consensus Range: 0.1% to 0.4%

Consumer Price Index

Consensus Forecast, Year-on-Year Change: 2.2%

Consensus Range: 2.1% 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: 1.9%

Consensus Range: 1.8% to 2.0%

Indications of price pressures for wholesalers and importers have yet to appear in force in consumer prices . Though the prior report for January did show higher costs for basics, only a limited increase is expected for February's core rate (less food & energy) which is seen up a modest 0.2 percent with the year-on-year expected to rise 1 tenth to 1.9 percent. The consensus for the headline CPI is also a monthly gain of 0.2 percent for a yearly rate that is also seen up 1 tenth, to 2.2 percent.

Wednesday

PPI-FD for February

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

Consensus Range: 0.1% to 0.5%

PPI-FD Less Food & Energy

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

Consensus Range: 0.2% to 0.3%

PPI-FD Less Food, Energy, & Trade Services

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

Consensus Range: 0.2% to 0.3%

Boosted by increases in service prices, producer prices resumed their march higher in January though forecasters are calling for moderating increases in February. The headline consensus is plus 0.2 percent. Less food and energy is seen up 0.2 percent with less food, energy and trade services expected to rise 0.3 percent.

Retail Sales for February

Consensus Forecast: 0.4%

Consensus Range: 0.1% to 0.6%

Retail Sales Ex-Autos

Consensus Forecast: 0.4%

Consensus Range: 0.2% to 0.6%

Retail Sales Ex-Autos Ex-Gas

Consensus Forecast: 0.4%

Consensus Range: 0.0% to 0.5%

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

Consensus Forecast: 0.5%

Consensus Range: 0.1% to 0.7%

After weak results in December and January, retail sales are expected to show some snap back in February with Econoday's consensus at a solid 0.4 percent. When excluding autos, where unit sales were flat in February, forecasters also see a 0.4 gain percent as they do when excluding both autos and also gasoline. When excluding autos, gas, food services and building materials, control group sales are expected to come in at a 0.5 percent gain.

Business Inventories for January

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

Consensus Range: 0.3% to 0.6%

A sizable build of 0.5 percent is expected for January business inventories, an increase that would give an early boost to the inventory component of first-quarter GDP.

Thursday

Initial Jobless Claims for March 10 week

Consensus Forecast: 230,000

Consensus Range: 225,000 to 235,000

Initial claims are expected to come in at 230,000 in the March 10 week vs 231,000 in the prior week. Claims have been low and consistent with minimal layoffs and strong demand for labor.

Import Prices for February

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

Consensus Range: -0.1% to 0.4%

Export Prices

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

Consensus Range: 0.1% to 0.5%

Import prices, boosted by increases in vehicles and food, showed pressure in the January report even when excluding petroleum. Moderation is the call for February with import prices expected to rise a moderate 0.3 percent with export prices also seen at an increase of 0.3 percent.

Philadelphia Fed Manufacturing Index for March

Consensus Forecast: 23.3

Consensus Range: 20.0 to 26.8

At a March consensus of 23.3, robust strength is once again the expectation for the Philly Fed manufacturing index. Rising backlogs and expectations of rising selling prices are the latest trends in a sample that would appear to be at risk of hitting capacity constraints.

Empire State Index for March

Consensus Forecast: 14.6

Consensus Range: 10.2 to 16.0

A bit cooler than the Philly Fed, expectations are nevertheless strong for February's Empire State index where the consensus is 14.6. Increased hiring, slowing deliveries, and traction for selling prices are some of the signs of capacity stress in this report.

Housing Market Index for March

Consensus Forecast: 72

Consensus Range: 70 to 73 

Home-builder confidence has been extremely strong with improvement in customer traffic an ongoing highlight. Assessments of current and future sales have been robust and have offered useful indications of gains for new home sales and permits. Econoday's March consensus calls for steady strength, at 72 for the housing market index which would be unchanged from February.

Friday

Housing Starts for February

Consensus Forecast, Annualized Rate: 1.284 million

Consensus Range: 1.256 to 1.322 million

Building Permits

Consensus Forecast: 1.324 million

Consensus Range: 1.300 to 1.392 million

Less strength is the expectation for February housing starts where the consensus is a 1.284 million annualized rate vs January's 1.326 million, as well as for housing permits, at a consensus 1.324 million rate vs 1.377 million. Starts and permits both surged in January led by the key single-family component. Note that the consensus ranges for both are wide.

Industrial Production for February

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

Consensus Range: 0.0% to 0.7%          

Manufacturing Production

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

Consensus Range: 0.2% to 1.0%

Capacity Utilization Rate

Consensus Forecast: 77.7%

Consensus Range: 77.4% to 77.9%

Industrial production has been held back by weakness in the report's manufacturing component though a bounce back, based on a factory-hour rise in the employment report, is the call for February, at a 0.3 percent increase overall and a 0.4 percent gain for manufacturing. Overall capacity utilization has been on the climb and another increase is expected, to 77.7 percent vs January's 77.5 percent.

Consumer Sentiment Index, Preliminary March

Consensus Forecast: 98.5

Consensus Range: 97.0 to 101.5

The consumer sentiment index is expected to open March at a preliminary 98.5 and down from February's 99.7. This report, which had been flat compared to other confidence reading, jumped sharply in February despite volatility in the stock market.

JOLTS: Job Openings for January

Consensus Forecast: 5.800 million

Consensus Range: 5.800 to 5.890 million

Job openings are expected to hold steady in January at 5.800 million vs December's lower-than-expected 5.811 million which marked the third decline in five months and pulled down the year-on-year gain to what is a still healthy 4.9 percent. In an economy at or close to full employment and possibly nearing the risk of wage inflation, a bit of cooling in openings might be a welcome sign of cooling.