The Economics News Week Ahead

One of the very heaviest weeks of the year will be highlighted by what looks to be a certain rate hike at midweek as the Federal Reserve moves to head off the risk of overheating in the labor market. The week opens with a summation of August's strength in the national activity index on Monday followed by what has become the most robust of any report on the economic calendar -- manufacturing data from the Dallas Fed which have been boosted by high energy prices. A contrast to the general strength of economic data has been home prices which have been slowing noticeably and which will get key updates from both Case-Shiller and FHFA on Tuesday. Consumer confidence has been on fire the past two years and hit a peak in the August report and only very slight slowing is expected for September's report on Tuesday. New home sales will open Wednesday's session and are expected to offer another reminder that housing has not been contributing much at all to 2018's economy. FOMC activities follow that afternoon and will include updated economic forecasts and also Jerome Powell's press conference. A pop higher for durable goods orders are expected on Thursday along with data on August international trade which in July opened third-quarter net exports in disappointment as exports fell sharply. Third-quarter GDP will again be in focus on Friday as personal income and more urgently consumer spending will get updates, results that are expected to be solid to moderate. The week closes out with the always robust Chicago PMI and recently robust consumer sentiment report.

Monday

National Activity Index for August

Consensus Forecast: 0.20

Consensus Range: 0.10 to 0.20

Strength in employment will be an offset to softness in manufacturing production for the national activity index in August where moderate acceleration is the expectation, to a consensus 0.20 vs 0.13 in July.

Dallas Fed General Activity Index for September

Consensus Forecast: 31.2

Consensus Range: 28.0 to 31.7 

Steady and robust have been the results of the Dallas Fed's manufacturing survey and more of the same is expected. Econoday's consensus for the September's general activity index is 31.2 vs 30.9 in August.

Tuesday

Case-Shiller, 20-City Adjusted Index for July

Consensus Forecast, Month-to-Month Change: 0.1%

Consensus Range: 0.1% to 0.4%

Case-Shiller, 20-City Unadjusted Index

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

Consensus Range: 0.5% to 0.6%

Case-Shiller, 20-City Unadjusted Index

Consensus Forecast, Year-on-Year Change: 6.3%

Consensus Range: 6.2% to 6.5%

Case-Shiller has missed the consensus the last four reports in a row as home prices have been slowing sharply. Another month of limited growth is the call for Case-Shiller data in July where the consensus gain for the 20-city adjusted index is only 0.1 percent vs 0.1 percent in June. The unadjusted year-on-year rate, at a consensus 6.3 percent, is seen holding at June's rate. The consensus for unadjusted monthly growth, reflecting the relative price strength of July compared with other months of the year, is 0.5 percent.

FHFA House Price Index for July

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

Consensus Range: 0.2% to 0.3%

The FHFA house price index, like Case-Shiller's 20-city index, has missed Econoday's consensus for the past four months as home-price appreciation has gone south this year. The FHFA house price index has managed only very small gains the past four reports with a bit better gain, at 0.3 percent, the consensus for July vs June's 0.2 percent.

Consumer Confidence Index for September

Consensus Forecast: 131.7

Consensus Range: 130.0 to 134.3

Forecasters see slight moderation to 131.7 for the September consumer confidence index which jumped very sharply to 133.4 in August which was the strongest reading since October 2000. Jobs-hard-to-get were very low in the August report and accurately predicted that month's strong employment report.

Richmond Fed Manufacturing Index for September

Consensus Forecast: 20

Consensus Range: 19 to 25 

The Richmond Fed's manufacturing index, which has beaten the consensus the last four reports in a row, is expected to come in at 20 in September vs 24 in August. Orders and backlog growth were unusually rapid in August and point to overall strength, and perhaps increasing capacity stress, for September.

Wednesday

New Home Sales for August

Consensus Forecast, Annualized Rate: 630,000

Consensus Range:  608,000 to 650,000

New home sales have missed Econoday's consensus the last two reports and by very large margins. A 630,000 rate is the consensus for August which would be little changed from 627,000 in July. A positive in the July report was a rise in supply though a jump in prices may prove a negative for sales in August.

Federal Funds Target for September 25 & 26 Meeting

Consensus Forecast, Midpoint: 2.125%

Consensus Range: 2.00% to 2.25%

A rate hike is the universal expectation among Econoday's panel for September's FOMC meeting, a hike that would be tied directly to the strength of the jobs market and risk that lack of available labor will begin to push inflation higher. The FOMC is expected to raise its federal funds target range by 25 basis points to a range between 2.00 and 2.25 percent with an implied target of 2.125 percent. Also released will be quarterly FOMC forecasts, which in the last set had penciled in an additional rate hike before year end. A press conference with Jerome Powell is also scheduled.

Thursday

Durable Goods Orders for August

Consensus Forecast, Month-to-Month Change: 2.0%

Consensus Range: 1.0% to 3.5%

Durable Goods Orders, Ex-Transportation

Consensus Forecast: 0.5%

Consensus Range: 0.3% to 1.0%

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

Consensus Forecast: 0.4%

Consensus Range: 0.3% to 0.4%

At plus 2.0 percent, bounce-back strength is the consensus for August durable goods orders which fell back in July on a decline in commercial aircraft. The decline masked what, however, was powerful strength in core capital goods orders where only limited give back is the expectation for August, at a consensus gain of 0.4 percent vs a 1.6 percent jump in July (revised from an initial 1.4 percent). Ex-transportation orders are expected to rise 0.5 percent.

Real GDP: 2nd Quarter, 3rd Estimate, Annualized Rate

Consensus Forecast: 4.3%

Consensus Range: 4.0% to 4.5%

Real Consumer Spending, Annualized Rate

Consensus Forecast: 3.8%

Consensus Range: 3.7% to 4.0%

GDP Price Index

Consensus Forecast: 3.0%

Consensus Range: 3.0% to 3.0%

The third estimate for second-quarter GDP is expected to come in at a 4.3 percent annualized rate vs 4.2 percent in the second estimate. Consumer spending is expected to come in unchanged at a 3.8 percent rate. The GDP price index is also seen unchanged at 3.0 percent.

International Trade In Goods for August

Consensus Forecast, Month-to-Month Change: -$70.8 billion

Consensus Range: -$72.2 to -$69.0 billion

The goods deficit is expected to narrow to a consensus $70.8 billion in August vs $72.1 billion in July (revised from an initial $72.2 billion). The results will update progress on third-quarter net exports which were very favorable in the second quarter.

Advance Wholesale Inventories for August

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

Consensus Range: 0.2% to 0.3%

Wholesale inventories are expected to rise 0.2 percent in August following a 0.6 percent build in July (revised from 0.7 percent in the advance reading). Despite the spike in July, inventories relative to sales at the wholesale level have been lean.

Initial Jobless Claims for September 22 week

Consensus Forecast: 210,000

Consensus Range: 210,000 to 222,000

Initial jobless claims are expected to come in at 210,000 in the September 22 week with data out of hurricane-hit North Carolina a wild card. In the prior report, initial claims and the 4-week average were at 50-year lows and continuing claims and 4-week average were at 46-year lows.

Pending Home Sales Index for August

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

Consensus Range: -0.5% to 2.0%

Pending home sales are expected to increase 0.2 percent in August after falling 0.7 percent in July. Sales of existing homes have been very soft  and are perhaps the biggest disappointment of the 2018 economy.

Friday

Personal Income for August

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

Consensus Range: 0.3% to 0.5%

Consumer Spending

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

Consensus Range: 0.2% 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: 2.3%

Consensus Range: 2.2% to 2.3%

Core PCE Price Index

Consensus Forecast, Month-to-Month Change: 0.1%

Consensus Range: 0.0% to 0.2%

Core PCE Price Index

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

Consensus Range: 1.9% to 2.1%

Personal income is seen rising a solid 0.4 percent in August while consumer spending is expected to increase a moderate 0.3 percent. The core PCE price index, which excludes both food and energy, is seen posting a 0.1 percent monthly rise for a year-on-year gain of 2.0 percent that would be right at the Federal Reserve's policy target. The core, which is the most closely watched of all inflation readings, first hit the Fed's 2 percent goal in March before edging to 1.9 percent in subsequent reports and then returning to 2.0 percent in July. The consensus for the overall PCE price index is 0.2 percent for a year-on-year rate of 2.3 percent.

Chicago PMI for September

Consensus Forecast: 62.0

Consensus Range: 59.0 to 64.5 

Steady strength at a very high level is the call for the Chicago PMI with the September consensus at 62.0 vs 63.6 in an August report that showed welcome easing in both delivery and employment pressures. Input costs, however, remained highly elevated with 60 percent of the sample reporting pass-through to customers.

Consumer Sentiment Index, Final September

Consensus Forecast: 100.8

Consensus Range: 96.0 to 101.0

Expected to hold at the preliminary score, Econoday's consensus for the final consumer sentiment index for September is expected to come in at 100.8. The preliminary report proved the strongest since March, reversing softening in prior months on rising assessments of both current conditions and expectations.