An extraordinarily heavy week of economic news will
include an FOMC statement at mid-week and an employment report at
week's end. The housing sector has been flat and only a modest gain is
the expectation for Monday's pending home sales report. With Tuesday's
personal income and outlays data already contained in second-quarter
GDP, the day's focus will be the quarterly release of the employment
cost index and a key reading on wage pressures. Vehicle sales on
Wednesday will offer the first solid hints on consumer spending for
July with data later in the day to include ISM manufacturing, which has
been red hot, and construction spending which has been mixed. But
Wednesday's big news will be the mid-afternoon FOMC statement where
there are no meaningful expectations for a rate hike. Jobless claims
and factory orders will mark time ahead of employment data on Friday
with expectations pointing to yet another month of significant
strength. The good news when there are so many reports in one week is
that the following week is guaranteed to be a lighter!
Monday
Pending Home Sales Index for June
Consensus Forecast, Month-to-Month Change: 0.8%
Consensus Range: 0.3% to 1.0%
Pending home sales are expected to
increase 0.8 percent in June after falling 0.5 percent rise in May.
This index has on trend been accurately forecasting flat to declining
results for the existing home sales report.
Dallas Fed General Activity Index for July
Consensus Forecast: 32.0
Consensus Range: 29.0 to 38.5
Dallas has been among the very strongest of the
regional surveys, the result of high energy prices which are making for
big gains in orders and also confidence in the outlook. Another month
of strength is expected for July, at a consensus 32.0 for the general activity index vs June's outsized 36.5.
Tuesday
Personal Income for June
Consensus Forecast, Month-to-Month Change: 0.4%
Consensus Range: 0.3% to 0.4%
Consumer Spending
Consensus Forecast, Month-to-Month Change: 0.4%
Consensus Range: 0.4% to 0.5%
PCE Price Index
Consensus Forecast, Month-to-Month Change: 0.1%
Consensus Range: 0.1% to 0.2%
PCE Price Index
Consensus Forecast, Year-on-Year Change: 2.3%
Consensus Range: 2.3% to 2.4%
Core PCE Price Index
Consensus Forecast, Month-to-Month Change: 0.2%
Consensus Range: 0.1% to 0.6%
Core PCE Price Index
Consensus Forecast, Year-on-Year Change: 2.0%
Consensus Range: 1.9% to 2.2%
Both personal income and consumer spending
are seen rising a moderate-to-solid 0.4 percent in June. Note that the
data will unbundle June's contribution from last week's second-quarter
GDP report. The core PCE price index, which excludes
both food and energy, is seen posting a 0.2 percent monthly rise for a
year-on-year gain of 2.0 percent. This index, which is the most closely
watched of all inflation readings, first hit the Fed's 2 percent goal
in the May report. The consensus for the overall price index is for a 0.1 percent monthly gain and a year-on-year rate of 2.3 percent.
Employment Cost Index for 2nd Quarter
Consensus Forecast, Quarter-to-Quarter Change: 0.7%
Consensus Range: 0.6% to 1.0%
Slightly easing pressure is expected for the employment cost index
with Econoday's consensus at a 0.7 percent rise in the second quarter
compared to 0.8 percent in the first quarter. The year-on-year rate in
the first quarter, at 2.7 percent, was the highest in 10 years in what
was a strong signal of wage pressures in the labor market.
Case-Shiller, 20-City Adjusted Index for May
Consensus Forecast, Month-to-Month Change: 0.4%
Consensus Range: 0.2% to 0.6%
Case-Shiller, 20-City Unadjusted Index
Consensus Forecast, Month-to-Month Change: 0.8%
Consensus Range: 0.7% to 0.9%
Case-Shiller, 20-City Unadjusted Index
Consensus Forecast, Year-on-Year Change: 6.6%
Consensus Range: 6.4% to 6.9%
Home-price appreciation appears to have tangibly
slowed during the Spring selling season. FHFA house prices have been
flat while Case-Shiller data slowed in April. But noticeable strength
is the call for Case-Shiller data in May where the consensus gain for the 20-city adjusted index is 0.4 percent vs only 0.2 percent in April with the unadjusted year-on-year rate seen holding at April's 6.6 percent. The consensus for unadjusted monthly growth, reflecting the relative price strength of May compared with other months of the year, is 0.8 percent.
Chicago PMI for July
Consensus Forecast: 62.0
Consensus Range: 57.3 to 64.8
Easing strength at a very high level is the call for the Chicago PMI
with the July consensus at 62.0 vs an overheated 64.1 in a June report
when delivery delays hit a 14-year high and input costs a 7-year high.
Consumer Confidence Index for July
Consensus Forecast: 126.9
Consensus Range: 126.0 to 127.5
Econoday's consensus, at 126.9 in July, is calling
for steady strength in the consumer confidence index which came in at
126.4 in June. Job assessments, especially the closely watched
jobs-hard-to-get subcomponent, have been extraordinarily strong.
Wednesday
Total Unit Vehicle Sales for July
Consensus Forecast, Annualized Rate: 17.1 million
Consensus Range: 16.6 to 17.3 million
Domestic-made Unit Vehicle Sales
Consensus Forecast, Annualized Rate: 12.9 million
Consensus Range: 12.9 to 13.2 million
A 17.1 million annualized rate is the consensus for total unit vehicle sales
in July, a solid outcome that, however, would compare with a 17.5
million pace in June which easily topped Econoday's consensus range.
Though July's rate is expected to be strong, the month-to-month
comparison with June's strength could point to weakness for the motor
vehicle component of the retail sales report. Domestic-made vehicles are expected to sale at a 12.9 million vs May's 13.6 million.
ADP, Private Payrolls for July
Consensus Forecast: 172,000
Consensus Range: 150,000 to 198,000
Econoday's consensus for ADP's private payroll estimate
in July is 172,000 which would compare with 177,000 in ADP's June
estimate and against 202,000 in the government's data for June. ADP is
always hit or miss and has underestimated the strength of the last two
employment reports.
PMI Manufacturing for July, Final
Consensus Forecast: 55.5
Consensus Range: 55.5 to 55.8
The PMI manufacturing index is
expected to come in at a final 55.5 in July, unchanged from the
mid-month flash. Orders in the flash report were very strong, reversing
what was a warning signal of tariff-related slowing in the June report.
ISM Manufacturing Index for July
Consensus Forecast: 59.4
Consensus Range: 58.0 to 60.4
Near record delivery delays and a plus 75 reading
for input costs headlined ISM's overheated manufacturing report in
June. Forecasters see the composite index easing only slightly from June's 60.2, at a consensus 59.4.
Construction Spending for June
Consensus Forecast, Month-to-Month Change: 0.3%
Consensus Range: -0.3% to 1.1%
A modest rate of monthly growth is the Econoday consensus for June construction spending,
at a 0.3 percent gain vs May's 0.4 percent rise. May's report was led
by multi-unit housing, offsetting another choppy performance for the
non-residential side of the report.
Federal Funds Target for July 31 & August 1 Meeting
Consensus Forecast, Midpoint: 1.875%
Consensus Range: 1.75% to 2.00%
There are no expectations that the FOMC will
respond to the very strong second-quarter GDP report or will launch a
retaliatory rate hike to assert its independence following the
administration's calls for policy adjustment to go slow. All of
Econoday's panel see the federal funds target holding at a 1.875 percent midpoint within a 1.75 to 2.00 percent range.
There is no press conference or economic forecasts to go along with
this meeting's statement where updates on consumer spending, the labor
market and inflation, should they prove hawkish, could raise the number
of future rate hikes that are expected.
Thursday
Initial Jobless Claims for July 28 week
Consensus Forecast: 218,000
Consensus Range: 216,000 to 225,000
Initial claims are expected to
come in at 218,000 in the July 28 week vs 217,000 in the prior week.
All readings in this report are at or near historic lows and consistent
with strong demand for labor.
Factory Orders for June
Consensus Forecast, Month-to-Month Change: 0.8%
Consensus Range: 0.2% to 2.5%
Durable goods orders for June were helped, but much
less than expected, by aircraft orders. Orders excluding
transportation equipment proved moderate while orders for core capital
goods proved solid. Forecasters see factory orders in May, a report that will include fresh data on non-durable goods, rising 0.8 percent.
Friday
Nonfarm Payrolls for July
Consensus Forecast: 188,000
Consensus Range: 150,000 to 205,000
Unemployment Rate
Consensus Forecast: 3.9%
Consensus Range: 3.8% to 4.0%
Private Payrolls
Consensus Forecast: 184,000
Consensus Range: 148,000 to 204,000
Manufacturing Payrolls
Consensus Forecast: 15,000
Consensus Range: 11,000 to 22,000
Participation Rate
Consensus Forecast: 62.8%
Consensus Range: 62.7% to 62.8%
Average Hourly Earnings
Consensus Forecast, Month-to-Month Change: 0.3%
Consensus Range: 0.2% to 0.4%
Average Hourly Earnings
Consensus Forecast, Year-on-Year Change: 2.7%
Consensus Range: 2.6% to 2.8%
Average Workweek
Consensus Forecast: 34.5 hours
Consensus Range: 34.4 to 34.5 hours
Following a very strong May and June, nonfarm
payrolls are expected to extend their strength to July where Econoday's
consensus is calling for a 188,000 rise. The unemployment rate,
at a July consensus of 3.9 percent, rose 2 tenths in June to 4.0
percent in what was a good sign as more people began to look for work.
Despite all the strength, wages were flat in June and mixed results are
expected for July with the monthly gain for average hourly earnings at a moderate at 0.3 percent consensus, not enough however to lift the year-on-year rate which is expected to hold at 2.7 percent. Private payrolls are seen rising 184,000 with manufacturing payrolls expected to show another solid increase at 15,000. The workweek is seen unchanged at 34.5 hours with the labor participation rate down 1 tenth to 62.8 percent.
International Trade Balance for June
Consensus Forecast: -$45.6 billion
Consensus Range: -$48.0 to -$41.0 billion
The international trade deficit for goods and services
is expected to widen in June to $45.6 billion vs May's deficit of
$43.1 billion. The goods side of this report has already been released
and showed sizable widening as exports fell and import growth held
steady.
PMI Services for July, Final
Consensus Forecast: 56.2
Consensus Range: 56.2 to 56.3
PMI services held steady and
strong in the flash report for July on what was described as "robust"
strength in new orders. The index is expected to hold at the 56.2 flash
reading.
ISM Non-Manufacturing Index for July
Consensus Forecast: 58.8
Consensus Range: 57.9 to 59.0
A standout showing of 63.2 in June's new order index points squarely at another month of exceptional strength for the ISM non-manufacturing index
in July where the consensus is 58.8. A plus in the June report was a
slight cooling in delivery times, input costs, and order backlogs.
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