weekly calendar 08/01 ~ 08/05/2016
Week of August 1 to August 5
July’s employment report on Friday is expected to come in at a very respectable 185,000 for nonfarm payrolls, a result that would add to the run of solid economic data so far this summer but probably not enough to raise talk of a September FOMC rate hike. Starting the week on Monday will be the ISM manufacturing report where past strength in new orders hasn’t, however, panned out to strength for the government’s factory data. ISM’s non-manufacturing report, which has in fact been accurately signaling general strength for the economy, follows at mid-morning Wednesday preceded by ADP whose employment calls have been on the mark this year.
Monday
ISM Manufacturing Index for July
Consensus Forecast: 53.2
Consensus Range: 52.0 to 54.0
The ISM manufacturing index is expected to hold steady at a moderate but constructive 53.2 in July, unchanged from June which was the best reading since February last year. New orders were an outstanding highlight of the June report, at 57.0 and pointing to strength in production and employment for ISM’s July report.
Construction Spending for June
Consensus Forecast, Month-to-Month Change: +0.6%
Consensus Range: +0.2% to +2.2%
Construction spending is expected to bounce back in June, up a consensus 0.6 percent following steep declines in the two prior months of minus 0.8 percent and minus 2.0 percent. Construction spending on non-housing has been soft but spending on housing has been steadily climbing. Recent strength in housing starts is a positive indication for this report.
Tuesday
Total Vehicle Sales for July
Consensus Forecast, Annualized Rate: 17.3 million
Consensus Range: 16.9 to 17.8 million
Unit vehicle sales are expected to bounce higher in July, up 3.6 percent to a 17.3 million annualized rate following a surprisingly soft 16.7 million rate in June. Expected strength would boost expectations for the vehicle component of the monthly retail sales report, a component that proved flat in June. Vehicle sales were a central strength in the 2015 economy but, despite low rates and aggressive manufacturer incentives, have been soft so far this year.
Personal Income for June
Consensus Forecast, Month-to-Month Change: +0.3%
Consensus Range: +0.3% to +0.5%
Personal Spending
Consensus Forecast: +0.3%
Consensus Range: +0.2% to +0.5%
PCE Price Index
Consensus Forecast: +0.2%
Consensus Range: +0.2% to +0.3%
Core PCE Price Index
Consensus Forecast: +0.1%
Consensus Range: +0.1% to +0.3%
A rise in personal spending data for June would be no surprise given consumer spending strength in the just released second-quarter GDP report. Following outsized strength in April and modest strength in May, forecasters see spending rising 0.3 percent in June. Personal income is also expected to post a meaningful gain, also at 0.3 percent following a 0.2 percent gain in May. Meaningful gains, however, are not expected for the core PCE price index where the consensus is calling for only a 0.1 percent increase.
Wednesday
ADP, Private Payrolls for July
Consensus Forecast: 165,000
Consensus Range: 160,000 to 185,000
ADP employment has had many more hits than misses this year including June when the report called for a 173,000 rise in private payrolls, a call that looks small compared to the outsized 265,000 actual outcome but what was well over expectations at the time. ADP’s estimate for July is expected to come in at 165,000 which would point to another positive month for the July employment report.
ISM Non-Manufacturing Index for July
Consensus Forecast: 56.0
Consensus Range: 55.5 to 57.0
The ISM non-manufacturing index has been signaling solid strength for the economy all year and another month of strength is expected for July where the consensus is calling for 56.0. New orders were very strong in June, at 59.9, which points to July strength for production and perhaps employment as well. The employment index for June was only 52.7 but it was up 3 full points in what did signal strength for what turned out to be an outstanding monthly employment report.
Initial Jobless Claims for July 30 week
Consensus Forecast: 265,000
Consensus Range: 262,000 to 270,000
Initial jobless claims were very low through most of July but did move higher in the July 23 week, up 14,000 to 264,000 with the Econoday consensus calling for 265,000 in the July 30 week. Seasonal layoffs tied to auto retooling have yet to take hold which points to the risk of elevated claims levels for the balance of the summer.
Factory Orders for June
Consensus Forecast, Month-to-Month Change: -1.8%
Consensus Range: -2.3% to -0.3%
Factory orders are expected to fall 1.8 percent in June as the advance release of a 4.0 percent decline in the durables component is expected to be offset by oil-related price strength for nondurables. Capital goods orders have been very weak underscoring caution in business expectations and further trouble for the nation’s productivity.
Nonfarm Payrolls for June
Consensus Forecast: 185,000
Consensus Range: 150,000 to 215,000
Private Payrolls
Consensus Forecast: 175,000
Consensus Range: 145,000 to 210,000
Unemployment Rate
Consensus Forecast: 4.8%
Consensus Range: 4.8% to 4.9%
Average Hourly Earnings
Consensus Forecast: +0.3%
Consensus Range: +0.2% to +0.3%
Average Workweek
Consensus Forecast: 34.4 hours
Consensus Range: 34.4 to 34.5 hours
Nonfarm payrolls got back on track in June, surging 287,000 to eclipse May’s 38,000 slump in a gain driven by temporary workers which points to permanent hiring ahead. Forecasters see growth in nonfarm payrolls easing back in July, to a consensus 185,000 in a result that would still be consistent with solid growth in the labor market. In other signs of strength, the unemployment rateis expected to dip 1 tenth to 4.8 percent with average hourly earnings picking up to 0.3 percent following June’s very soft 0.1 percent gain.
International Trade Balance for June
Consensus Forecast: -$43.0 billion
Consensus Range: -$43.6 to -$42.1 billion
The nation’s trade deficit is expected to widen in June, to a consensus $43.0 billion vs May’s $41.1 billion. Advanced data on June goods trade showed an increase in exports but a larger increase for imports, a mix that points to a larger deficit though increases in both point to rising cross-border demand.
Consumer Credit for June
Consensus Forecast: +$15.5 billion
Consensus Range: +$14.0 to +$17.1 billion
Consumer credit is expected to rise $15.5 billion in June following May’s sizable $18.6 billion gain. Growth in revolving credit, where credit-card debt is tracked and which had shown life earlier this year, was weak in both May and April. Non-revolving credit has been the strength of this report, underpinned by student loans but also reflecting strong demand for vehicle financing.
