By Theresa Sheehan
PRINCETON (SMRA) – Although plenty of economic data will be
released in the week ahead, the feel is for a quieter time in advance of
the March employment report on April 1.
The major reports will probably be those concerning sales of new
and existing homes. Fed officials are back out in public after the
Federal Open Market Committee meeting, and their respective inflation
outlooks will get a lot of attention.
Economic data is spread out fairly evenly over the course of the
week. In large part it will concentrate on the housing market.
February sales of existing homes will be reported at 10:00 ET
Monday, and those for new single-family homes will be released at 10:00
ET Wednesday. Overall, the housing market remains sluggish, particularly
for single-family homes. This may change as the spring progresses with
signs of an improved labor market and still very favorable mortgage
rates. But at the moment consumers are still less confident and the
weather did not encourage home shopping.
The FHFA House Price Index for January at 10:00 ET Tuesday will
probably not have any encouraging news on home values. Recent months
have seen a slight downward trend in prices, although it is still above
the lows of the housing market crisis.
Release of the Richmond Fed’s Manufacturing Survey for March at
10:00 ET Tuesday should reinforce what the New York and Philadelphia Fed
outlooks had to say about conditions in the factory sector. The
components for new orders and employment should continue to signal
expansion, and overall activity remains on the rise.
The report on new orders for durable goods in February is set to be
released Thursday morning. Once more the transportation component will
probably have the biggest impact on the headline number. Civilian
aircraft orders were down for a second month in a row, and will
contribute to softness in transportation, although that is likely to be
offset by demand for new motor vehicles.
The final Reuters/University of Michigan Consumer Sentiment Index
could well be revised lower from the 68.2 in the preliminary report.
Consumers have been buffeted by horrendous news from the earthquake in
Japan and the subsequent volatility in financial markets. Gasoline
prices have also remained high.
Initial claims for the week-ended March 19 are expected to be in
line with recent weeks, showing a modest downward trend for initial
claims, and steady declines in continuing and extended benefits. The
labor market is mending, albeit at a slow pace.
The Bureau of Labor Statistics will release February data for mass
layoff activity at 10:00 ET Tuesday and for state unemployment 10:00 ET
Friday. Outside of the government sector, layoff activity has returned
to pre-recession levels and has exhibited both fewer layoff actions and
smaller numbers of claimants as a result of those actions. State data on
unemployment will provide more detail to back up the national statistics
but should not change the overall picture of declines in joblessness.
The second estimate of GDP for the fourth quarter 2010 at 8:30 ET
Friday will put a final number on growth, but with the first quarter
2011 nearly complete and much fresher data to shape the outlook, markets
will pay scant attention to this report.
There are no major central bank announcements scheduled in the
coming two weeks. This may provide policymakers with a little breathing
space to assess the potential impacts from the recent natural disasters
and geopolitical events. Short-term market volatility should have faded
by the first full week in April. However, most central banks will be
putting policy on hold for the time being.
Fed policymakers return to making public comments after the FOMC
meeting on March 15, when monetary and credit policy was not altered,
the economic assessment was more upbeat, and current upward price
pressures from commodities were expected to be transitory. The most
recent moves for key commodities like oil would seem to support that
view. However, the consequences to the global economy of the massive
earthquake and tsunami that devastated northeastern Japan will be very
much on policymakers’ minds.
Tuesday, Cleveland Fed President Sandra Pianalto will speak at the
University of Akron Economic Summit on the topic of “The Economy: 2011
and Beyond.” Earlier in the day, Dallas Fed President Richard Fisher
will be in Germany to give a speech at the Frankfurt Finance Summit.
Wednesday, Chairman Ben Bernanke will be in San Diego, California
to address the Independent Community Bankers of America’s National
Convention and Techworld. The Fed has been reaching out more to
community banks in an effort to ensure the proper balance between risk
and creditworthiness in lending to businesses.
Friday has a number of District Bank Presidents giving speeches.
Dallas Fed President Richard Fisher will be in Brussels, Belgium to give
a speech. Minneapolis Fed President Narayana Kocherlakota will be in
Marseille, France to speak at the IDEP-Institut D’Economie Publique
International Conference on Asset Prices, Credit and Macroeconomic
Policies. His speech topic will be “Bubbles and Unemployment.”
Chicago Fed President Charles Evans Friday will breakfast with wire
reporters at the Chicago Fed. Atlanta Fed President Dennis Lockhart will
be in Fort Myers, Florida speaking at the 6th Annual Bonita/Estero
Market Pulse Conference at Florida Gulf Coast University. His topic will
be the US economic outlook. Philadelphia Fed President Charles Plosser
will be in New York, NY to speak at a Shadow Open Market Committee event
called “Beyond the Short Run: A Framework for Long-Run Monetary Policy.”
The Treasury will auction the re-opening of the 10-year TIPS notes
on Thursday. Also on Thursday, it will announce new 2-, 5-, and 7-year
notes to be auctioned on the subsequent Monday through Wednesday,
respectively. All of these will settle on March 31.
** Stone & McCarthy Research Associates **
[TOPICS: M$$FI$,M$U$$$,MAUDS$]
