This week's big round of economic reports for March will help economists put the finishing touches on their expectations for first-quarter economic growth. The data will also help shape growth expectations for the current quarter.
The government will issue its first estimate of real gross domestic product on Apr. 30. Right now, most economists are betting the first quarter’s growth rate was essentially zero, with about equal chances of a fractional minus or plus. That performance would follow the fourth quarter’s slim 0.6% advance.
That’s hardly an obvious recession scenario. However, economists’ are taking a much more downbeat view of the second quarter. Many now expect growth in real GDP in the current quarter to turn decidedly negative. This will be a period of maximum stress for the economy this year.
Consumers are already reeling from costlier energy, falling home prices, and tighter credit. Now household income is taking a hit from shrinking payrolls and rising unemployment. Falling payrolls means businesses are also showing more signs of caution, and they're pulling back on their outlays for new equipment and construction. This quarter, the economy appears to be losing a big chunk of the support to overall demand that consumers and businesses had been providing up to now.
The coming week’s data will help to assess just how much momentum the economy was losing as it headed into the second quarter. Monday’s report on March retail sales will be especially crucial in that regard. March measures of consumer confidence collapsed amid dire news from the financial markets and downbeat headlines about the labor markets. March sales will show whether consumers are making equally dramatic cutbacks in their spending.
March industrial production will be scrutinized for two things: The extent to which exports are buoying manufacturing output and the degree to which production of business equipment is holding up. Those are key indicators of capital spending.
Other important indicators that will help economists assess the current path of GDP will be business inventories and housing starts. Rising inventories could be a sign that stocks are piling up in the face of weakening demand, a scenario that could lead to more cutbacks in output and jobs in the second quarter. Housing starts are expected to post another decline, with no sign that the housing drag is lessening in the current quarter.
Also, watch for fresh readings on producer and consumer prices, especially coming in the same week when several Federal Reserve policymakers will be speaking. Philadelphia Fed President Plosser, who dissented against the size of the Fed’s latest rate cut, will be speaking on the goals of monetary policy. Fed Vice Chairman Kohn will discuss credit market issues, while both Richmond Fed President Lacker and Boston Fed President Rosengren will speak on market liquidity and systemic risk.
Here’s the weekly economic calendar, from Action Economics.
Top Reports for the coming week
Top Reports
Date
Time
For
Median Estimate
Last Period
Retail Sales
Monday, April 14
8:30 a.m.
March
0.1%
-0.6%
Retail Sales (ex autos)
Monday, April 14
8:30 a.m.
March
0.2%
-0.2%
Business Inventories
Monday, April 14
10:00 a.m.
February
0.3%
0.8%
Producer Price Index
Tuesday, April 15
8:30 a.m.
March
0.4%
0.3%
Producer Price Index (ex food and energy)
Tuesday, April 15
8:30 a.m.
March
0.2%
0.5%
Empire State Index
Tuesday, April 15
8:30 a.m.
April
-15.1
-22.2
Consumer Price Index
Wednesday, April 16
8:30 a.m.
March
0.4%
0.0%
Consumer Price Index (ex food and energy)
Wednesday, April 16
8:30 a.m.
March
0.2%
0.0%
Housing Starts (Mln)
Wednesday, April 16
8:30 a.m.
March
1.029
1.065
Industrial Production
Wednesday, April 16
9:15 a.m.
March
-0.1%
-0.5%
Capacity Utilization Rate
Wednesday, April 16
9:15 a.m.
March
80.2%
80.4%
Philadelphia Fed Index
Thursday, April 17
10:00 a.m.
April
-13.8
-17.4
Leading Indicators Index
Thursday, April 17
10:00 a.m.
March
-0.1%
-0.3%