Makroökonomische Daten: 29 – 03 Mai 2013

Apr. 26, 2013

Minute Read

In the euro area, focus will be on the ECB meeting. The EU Commission’s economic sentiment index is expected to drop slightly in April, to 89.5 from 90. In Italy, business confidence is forecast at 88.6……………

Harmonised inflation is estimated to come in stable in Germany at 1.8%, but to drop in Spain to 2.4%, and in Italy to 1.5%. March retail sales are expected to balance the previous month’s decline both in Germany and in France. Unemployment should remain stable in Germany, while rising back in Italy and in the euro area as a whole.

A host of very important data and events are due this week in the United States. The FOMC meeting should be quiet, with no indication of imminent changes, ahead of the release of fresh economic data. As regards April data, the ISM surveys should confirm indications of a slowdown in the pace of growth, the Employment Report is expected to show faster job growth, while confirming the unemployment rate at 7.6%, consumer confidence should be held back by the recent tax hikes. Among March data, personal spending is estimated to have remained weak, as opposed to a sustained rise in personal income.

Monday 29 April
Euro area
– Euro area. The EU Commission’s economic sentiment index is expected to drop slightly again in April, to 89.5 from 90. Confidence is expected to have deteriorated in the manufacturing sector, to -11.8 from 12.5, as opposed to broadly stable confidence in services, at -6.9 from – 6.7 the previous month. Households’ confidence should be confirmed on the rise to –22.3 from a previous reading of -23.5, as per preliminary estimates. On average, the economic sentiment index has hovered around 90.2, on the recovery from 85.7 at the end of 2012, but still below its long-term average. A stronger recovery in foreign demand and orders is expected in 2Q 2013.
– Italy. Business confidence among manufacturing companies could drop back down in April, to 88.6 based on our estimates, from 88.9 in March. The decline would be in line with the trend outlined by manufacturing sector surveys in the other main euro area countries. However, sentiment is stabilising and is not showing a clear trend: while the low-point (hit almost a year ago) seems to have been overcome, a significant recovery is still not in sight.
– Germany. Retail sales should be up by 0.4% m/m in March, from a downside-revised rate of -0.3% m/m in February, vs. a preliminary estimate of +0.4% m/m. Thanks to the strong start to the year, retail sales are forecast to close the quarter at +1.8% q/q.
– Germany. Data from the Laender should outline stable consumer prices in April, thanks to favourable seasonal effects. Inflation is expected to rise to 1.7% from a previous rate of 1.4% at the national level, while remaining stable at 1.8% in terms of the harmonised rate. In the months ahead, inflation in Germany is expected to stay broadly in line with its current levels, and to subsequently rise back to 2.0% in the closing months of the year, on the back of the commodity price increases incorporated in our estimates.
– Spain. The preliminary estimate of inflation should outline a rise to 2.4% from 2.3% the previous month in terms of the national measure. However, harmonised inflation is forecast to drop by two-tenths to 2.4%. In the months ahead, Spanish inflation should moderate towards 2% and drop below 2% between August and November, as the effects of the VAT rate hike (last September) are removed from the annual comparison.

United States
– Personal spending in March should be up by +0.1% m/m, after +0.7% m/m in February. In light of weak retail sales and of CPI decline in March, spending on goods, durables and nondurables, is estimated to have dropped; however, we expect a solid increase in the service component, which could more than outweigh the goods correction. Personal income in March should show a +0.4% m/m increase. Between December and March, personal income fluctuated significantly, due to temporary factors (early payment of dividends in December to avoid the tax hikes enforced at the beginning of 2013, income tax and payroll tax hikes). In March, the trend of personal income should normalise, and be supported by the change in the labor compensation. The March Employment Report recorded a significant increase in working hours: despite below-par job growth, the lengthening of the workweek should determine a +0.4% m/m increase in labor income. The consumption deflator should drop by – 0.1% m/m, from +0.4% m/m in February, further compressing the year-on-year trend, to 1% y/y; the core deflator is estimated to be unchanged month-on-month, and to drop by 1.1% y/y from 1.3% y/y in February. The downtrend of the deflator is gaining relevance for the determination of monetary policy: lacking a stabilisation/upside reversal, the FOMC may decide to keep monetary policy unchanged even beyond the second-third quarters of 2013, despite the improved economic outlook and labour market conditions. The savings rate in March should increase to 2.9% from 2.6% in February.

Tuesday 30 April
Euro area
– The euro area unemployment rate is forecast to hit a long-term high in April, at 12.1%, after having remained stable at 12% in March. Greece and Spain still stand out as the most heavily hit countries, with a jobless rate of over 26% (with unemployment rates among young adults soaring to over 50%). We expect the euro area unemployment rate to peak in around six months’ time.
– Italy. Unemployment could rise back in March, to 11.8%, after dropping surprisingly to 11.6% in February. The February rebound should be read as temporary, in light of the persistently negative views on the employment trend expressed by companies. The unemployment rate is expected to continue to increase until the opening months of 2014.
– Italy. Consumer prices are estimated to be up by 0.2% m/m in April (in line with March), and by 0.6% m/m at the harmonised level. Risks to the forecast are skewed to the downside.
Year-on-year inflation may drop further, by three-tenths (to 1.3% at the national level, and 1.5% in terms of the harmonised rate). The reading could mark a low-point for inflation, which we expect to remain broadly stable throughout the rest of the spring, and to rise back starting in July.
– France. Consumer spending could recover by 0.4% m/m in March, after declining in the two previous months (-0.9% in January and -0.2% in February). The year-on-year change would be back in positive territory at +0.3%, from -2.9% in February. This would in any case result in a -0.7% q/q drop (from a previous rate of -0.1% q/q), pointing to downside risks to the national consumption and GDP trends in 1Q 2013.
– Euro area. The preliminary estimate of euro area inflation should remain stable in April at 1.7%. Euro area inflation was 2.2% y/y at the end of 2012. The estimate is explained by the moderation of the energy component and by a favourable base effect. The average 2013 inflation rate in the euro area is estimated at 1.7% from 2.5% in 2012, and risks to the forecast are skewed to the downside. The significant slack in the economy is driving down the prices of goods net of the energy component.
– Spain. The preliminary estimate of 1Q 2013 GDP growth should be negative by -0.6% q/q, from -0.8% q/q at the end of 2012. In annual terms, GDP is forecast to drop by -2.1% y/y, from -1.9% previously. The Bank of Spain estimates a quarterly decline of only -0.5% q/q.
Support to growth is only expected to come from net exports (-0.7% q/q), whereas domestic demand is estimated to have contracted by -1.4%, from -1.9% in 4Q 2012. The recession in Spain will continue at least until the turn of the year, and possibly into 2014. Public accounts are well off the 3% threshold, and further spending cuts are very likely to be in the pipeline.
In year-on year terms, Spanish GDP is forecast to contract by 1.6% in 2013 from -1.4% in 2012.
– Germany. The unemployment rate should come in stable at 6.9% in April. Sentiment indices do not point to a reversal of the employment trend for the time being. Unemployment in Germany may even rise to 7.2% by the start of the summer, as the recovery in the opening months of the year seems to be proving weaker than expected.

United States
– The Chicago PMI is forecast to drop in April, to 52 from 52.4 in March. Manufacturing sector surveys were weak in March, and the first indications for April are consistent with a further slowdown in the pace of growth. Figures for the beginning of 2Q 2013 remain disappointing, although the Beige Book was more optimistic and pointed to a more sustained expansion, with positive indications for the auto sector. We stick to our view that the slowdown in the pace of growth in 2Q 2013 will prove to be transitory, and be followed by a reacceleration towards the end of the quarter.
– Consumer confidence as surveyed by the Conference Board is forecast to rise modestly in April, to 61 from 59.7 in March. The University of Michigan index suffered a new correction with the preliminary April reading, and dropped to 72.3 from 78.6; on the other hand, the weekly Bloomberg Consumer comfort index rebounded sharply in the week of April 14, to – 29.2 from -34 at the beginning of the month. Lower gasoline prices, and the agreement on the a less drastic implementation of the automatic public spending cuts to avert dramatic effects on federal spending, should contribute help the Conference Board confidence index rise back modestly.

Wednesday 1 May
United States
– Construction spending in March is forecast to be up by 0.2% m/m, after +1.2% m/m in February. Spending should continue to be supported by the residential sector, still positive, and by a recovery in the non-residential segment, which suffered a sharp correction in February. Public spending is estimated to have decreased on a monthly basis.
– The manufacturing sector ISM is forecast to drop to 50.5 from 51.3 in March. The first April surveys (Philly Fed and Empire) both pointed to a marginal decline compared to March, and the ISM should follow suit, although the indications provided by the Beige Book were relatively more upbeat than the surveys’. The orders trend, beyond volatility tied to the civil aviation segment, is positive yet moderate.
– The FOMC meeting should yield a statement broadly in line with the one issued in March. The Committee could highlight the slowdown outlined by recent data releases, while stressing the likely transitory nature of negative surprises. In light of the debate over the monthly pace of asset purchases, at the May meeting, which will not be followed by a press conference, the Committee is likely to maintain a wait-and-see stance, leaving unchanged the indications contained in the statement, and waiting to assess April and May data before signalling any potential policy changes at the June meeting. The statement will call attention back to the risk of excessive disinflation, given the downtrend in prices recorded over the past few months.
– Vehicle sales in April are forecast stable at 15.2 million vehicles ann., confirming the levels recorded between December and March.

Thursday 2 May
Euro area
– The final euro area manufacturing PMI should confirm the flash estimate of 46.5 (down from 46.8 in March). The decline of the German index should be confirmed, as opposed to a slight recovery of the French PMI. The Italian and Spanish PMIs are also likely to come in lower.

United States
– The trade balance deficit in March should narrow by to 41.8 billion dollars from 43 billion in March. This could essentially be the result of lower oil prices. In nominal terms, imports should be down by -0.3% m/m (on a sharp drop in oil prices, accompanied by a smaller decline in volumes), as opposed to an expected +0.5% m/m increase in exports.

Friday 3 May
United States
– Non-farm payrolls are estimated to be up by 150k in April, after a weak +88k rise in March.
The change should stay below the average for the past six months (181k), while reaccelerating modestly. Between March and April, the job trend should feel the effects of the automatic public spending cuts contained in the Budget Control Act, which induced the Department of Defence in particular to implement partial employee furloughs and to freeze purchases from private contractors, also generating repercussions on private employment.

Also, especially adverse weather conditions between the end of March and mid-April may have cooled hirings in the construction sector and in other segments typically driven by the improvement in the weather related to the Spring. Employment form the household survey, typically very volatile, should show a positive change again after coming in negative by -206k in March (average over the past six months of 160k, close to the nonfarm payrolls figures from the establishment survey). The unemployment rate should be stable at 7.6%, with a one-tenth increase in the participation rate to 63.4%, after the two-tenth plunge in March to 63.3%, a low since May 1979. Hourly wages are forecast to accelerate modestly to +0.2% m/m, in line with the trend, after staying flat in March.

– The non-manufacturing sector ISM is expected to be almost unchanged in April, at 54.5 from 54.4 in March. The breakdown of the survey was positive in March, albeit less so than in February, with the activity index at 56.5, orders at 54.8, and employment at 53.3. The Beige Book points to growth in most of the services sector, with indications of an expected acceleration in several segments. Therefore, the April survey should confirm at least the pace of growth seen in March, staying close to the average for the past six months (55.2).

Appendix

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