The Business News Week Ahead

A week shortened by Good Friday begins with a look back at February from the national activity index on Monday. Factory indications for March open with Monday's Dallas Fed, where readings have been unusually robust, followed on Tuesday by the Richmond Fed which is coming off a very strong February. Consumer data will be one of the week's themes, starting with consumer confidence on Tuesday followed by consumer sentiment on Thursday both of which, boosted by this year's tax cut, have been accelerating. Thursday's major release will be personal income and consumer spending with income seen on the rise but not spending which is expected to be flat once again. The report's price data, based on February's consumer price report, are also expected to be flat. Housing will see updates from Case-Shiller on Tuesday, where home prices are expected to continue to rise, and pending home sales on Wednesday which have been unexpectedly weak in recent reports. Fourth-quarter GDP will get one final look on Wednesday while the outlook for first-quarter GDP will get major inputs from advance inventory data and especially from February advance goods trade, also on Wednesday.

Monday

National Activity Index for February

Consensus Forecast: 0.05

Consensus Range: 0.05 to 0.20

Strength in both mining and manufacturing production as well as strong job growth are likely to offset softness in consumption and housing to help February's national activity index stay positive at 0.05 vs January's 0.12

Dallas Fed General Activity Index for March

Consensus Forecast: 30.9

Consensus Range: 26.0 to 38.5 

Forecasters are looking for a little cooling in the Dallas Fed's general activity index, to 30.9 in March vs February's outsized 37.2. The result in February lifted Dallas over Philly as the very strongest of the regional manufacturing samples and hints of overheating were evident, including increases in unfilled orders, capacity utilization, and wages.

Tuesday

Case-Shiller, 20-City Unadjusted Index

Consensus Forecast, Year-on-Year Change: 6.2%

Consensus Range: 5.4% to 6.3%

Continuing strength is the call for Case-Shiller home prices where Econoday's consensus for the 20-city year-on-year rate is 6.2 percent. Cities out West are leading the price gains and are perhaps raising questions over bubbles in the region. High prices are in part reflecting low supply of available homes on the market.

Consumer Confidence Index for March

Consensus Forecast: 131.0

Consensus Range: 128.3 to 132.0

This year's tax cut has far offset any concerns over stock market volatility for the consumer confidence report. Income expectations have been solid and the assessment of the labor market strong. And another month of exceptional strength is the call for March, at a consensus 131.0 vs February's 130.8.

Richmond Fed Manufacturing Index for March

Consensus Forecast: 22

Consensus Range: 15 to 28

Easing acceleration is Econoday's consensus for the Richmond Fed manufacturing index, at a consensus 22 for March vs February's near record at 28. Capacity stress in this sample is a question given February's rise in capacity utilization together with sizable pressures for input costs and selling prices.

Wednesday

Real GDP: 4th Quarter, 3rd Estimate, Annualized Rate

Consensus Forecast: 2.7%

Consensus Range: 2.4% to 3.0%

Real Consumer Spending, Annualized Rate

Consensus Forecast: 3.8%

Consensus Range: 3.7% to 4.1%

GDP Price Index

Consensus Forecast: 2.3%

Consensus Range: 1.6% to 2.3%

Boosted by smaller drag from inventories, the third estimate for fourth-quarter GDP is expected to come in at a 2.7 percent annualized rate vs 2.5 percent in the second estimate. The consumer was the driver in the fourth quarter and no change is expected, with consumer spending seen at a 3.8 percent rate. The GDP price index is seen unchanged at a 2.3 percent rate.

International Trade In Goods for February

Consensus Forecast, Month-to-Month Change: -$74.0 billion

Consensus Range: -$76.4 to -$73.0 billion

The goods deficit in February is expected to narrow to a consensus $74.0 vs $75.3 billion in December (revised from an initial $74.4 billion). Exports weakened in January, including declines for capital goods and industrial supplies to open the first-quarter trade balance on a negative note. Also released with the report will be advance February data for both wholesale inventories and retail inventories which, like net exports, will also be inputs into first-quarter GDP.

Advance Wholesale Inventories for February

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

Consensus Range: 0.3% to 0.7%

February wholesale trade inventories are expected to rise 0.5 percent following strong builds of 0.8 and 0.7 percent in the prior two months.

Pending Home Sales Index for February

Consensus Forecast, Month-to-Month Change: 2.7%

Consensus Range: 0.5% to 6.0%

Pending home sales are expected to rebound 2.7 percent in February after posting a very sharp 4.7 percent decline in January which did not, however, result in weakness for final sales of existing homes which instead posted a solid February gain. Note that the consensus range, from 0.5 percent to 6.0 percent, is very wide.

Thursday

Initial Jobless Claims for March 24 week

Consensus Forecast: 228,000

Consensus Range: 220,000 to 230,000

Initial claims are expected to come in at 228,000 in the March 24 week vs 229,000 in the prior week. Claims have been low and consistent with minimal layoffs and strong demand for labor.

Personal Income for February

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

Consensus Range: 0.3% to 0.9%

Consumer Spending

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

Consensus Range: -0.1% to 0.4%

PCE Price Index

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

Consensus Range: 0.1% to 0.2%

PCE Price Index

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

Consensus Range: 1.7% to 1.7%

Core PCE Price Index

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

Consensus Range: 0.1% to 0.2%

Core PCE Price Index

Consensus Forecast, Year-on-Year Change: 1.5%

Consensus Range: 1.5% to 1.6%

Income proved steady and firm in January but not spending which was soft and which will be held back in February by the month's decline in retail sales. Personal income is seen rising 0.4 percent in February while consumer spending, getting a likely boost from spending on services, is expected to come in at a gain of 0.2 percent. Price data look to remain subdued given the modest results of February's consumer price report. The PCE price index is expected to rise 0.2 percent in February for a year-on-year rate of 1.7 percent with the very closely watched core PCE price index, which excludes both food and energy, also seen up 0.2 percent for a yearly 1.5 percent which would be unchanged from January.

Chicago PMI for March

Consensus Forecast: 63.2

Consensus Range: 60.0 to 65.0

Forecasters are calling for renewed acceleration in the Chicago PMI report, to a consensus 63.2 in March vs February' s 61.9. February's report was filled with 6-month lows but lows that still pointed to very strong rates of growth.

Consumer Sentiment Index, Final March

Consensus Forecast: 102.0

Consensus Range: 101.0 to 102.0

Consensus for the final March reading of the consumer sentiment index is 102.0 which would be unchanged from the month's preliminary reading. General confidence among lower income respondents helped drive gains in the preliminary report where strength was centered in the current conditions component, offsetting a decline in expectations which were pulled lower by emerging income doubts among higher income respondents. Inflation expectations were a highlight of the preliminary report, rising 2 tenths for the year-ahead outlook to a 4-year high of 2.9 percent.