Today's Economic Data Highlights

A heavy day with retail sales, the CPI, industrial production, Michigan confidence, and business inventories….
 
8:30: Retail sales for Dec…another sturdy gain?  This report is apt to show large increases in both the headline and ex auto components (autos contributing slightly), with higher gasoline prices a significant contributing factor.  The core component (ex autos, gasoline, and building materials) should nonetheless show a sturdy gain, probably on the order of about 0.4%.
On total sales, GS: +0.9%; median forecast (of 82): +0.8%, ranging from -0.1% to +1.3%; last: +0.8%;
On sales ex autos, GS: +0.8%; median forecast (of 76): +0.7%, ranging from -0.5% to +1.2%; last +1.2%.
 
8:30: Consumer price index for Dec….more energy and food pressure.  Both food and (especially energy weigh in on the high side of a report that will also show tobacco price increases push the core index up.
On headline, GS: +0.59%; median forecast (of 81): +0.4%, ranging from +0.2% to +0.6%; last +0.12%.
On core, GS: +0.14%; median forecast (of 77): +0.1%, ranging from flat to +0.2%; last +0.10%.
 
9:15: Industrial production and capacity utilization for Dec…a decent gain?  Although the manufacturing component of the labor market report was no great shakes (payrolls down 10k and a flat workweek), this masked a modest increase in hours worked by production and nonsupervisory workers.  Add productivity gains into the mix, and this was enough to suggest a decent increase in production.

On production: median forecast (of 81): +0.5%, ranging from +0.1% to +1.0%; last +0.4%.
On capacity utilization: median forecast (of 71): 75.6%, ranging from 75.0% to 76.1%; last 75.2%.
 
10:00 (9:55 to subscribers): Reuters/University of Michigan consumer sentiment for Jan (prelim)…crawling up?  As the economy picks up steam, economists expect this to show up in modest gains in confidence.  ecast for this index is slightly higher than the preliminary figure reported nearly two weeks ago.  The median expectation for inflation five to ten years ahead was 2.8% in December for the third month in a row, the midpoint of an extremely tight range in which this indicator has fluctuated over the past year.

Median forecast (of 71): 75.5, ranging from 73 to 78; last 74.5 (Dec final).
 
10:00: Business inventories for Nov…downside risks.  It doesn’t appear that forecasters have taken the 0.2% drop in wholesale inventories fully on board, as the median forecast implies nearly a 1.5% surge in retail inventories given what’s already been reported for the manufacturing (+0.8%) and wholesale sectors.  We haven’t seen an increase of this magnitude since 1994, and there’s no obvious reason for it now.  Thus, while we don’t forecast the monthly data on a regular basis, we’d take the low side on this report.

Median forecast (of 49): +0.7%, ranging from +0.1% to +1.3%; last +0.7%.

From Goldman's Ed McKelvey

Comments

[lucaleung]

Much worst than expected.