Several important releases today, including the advance report for Q2 GDP, which consensus sees at 1.8% and Goldman is materially lower at 1.5%. A QE Lite POMO closes at 11:00 am. Chicago PMI and UMich consumer confidence round out the data, which will again be vastly inferior in market movery to headlines out of Europe and the US.
8:30: GDP (Q2-Advance): Another soft quarter & annual revisions. Goldman estimates that real GDP increased by just 1.5% (qoq ar) in the second quarter. Relative to Goldman's expectations earlier in the year, consumer spending was the major disappointment: available data suggest consumption growth of just 0.5% during the quarter. GS look for a moderate gain in business fixed investment, roughly flat housing investment, and some boost from inventory building. Government spending was likely a drag on growth overall, with weakness at the state and local level offsetting a small gain in federal government outlays.
Along with today’s Q2 GDP report, the BEA will also publish annual revisions to the US national accounts. These will incorporate new source data, updated seasonal adjustment, and presentational changes. Real growth rates in GDP and its components will be revised back to 2003, and there could be very small revisions to earlier years as well. Real GDP levels will be revised back to 1929. Revisions could be sizable in imports (due to new seasonal adjustment for imported petroleum) and possibly consumer spending (due to new source data).
GDP: GS: +1.5%; Consensus: +1.8%; Last (Q1-Final): +1.9%. MAP: 4
GDP price index: GS: +2.0%; Consensus: +2.0%; Last: +2.0%.
PCE core index: GS: +2.3%; Consensus: +2.3%; Last: +1.6%.
8:30: Employment cost index (Q2): Moderate wage growth. We forecast that growth in the Employment Cost Index (ECI) retreated to 0.4% (qoq, not annualized) in Q2 after a spike in benefit growth in Q1.
GS: +0.4%; Consensus: +0.5%; Last: +0.6%. MAP: 0
9:45: Chicago purchasing managers’ index (July). Small decline. Other regional manufacturing surveys available for the month of July point to a small decline in the Chicago purchasing mangers’ index.
GS: 58.5; Consensus: 60.0; Last: 61.1. MAP: 4
10:00 (9:55 to subscribers): Reuters/University of Michigan consumer sentiment (July final): Stable? Forecasters are looking for this index to stabilize after a sharp drop in the preliminary July report. Daily confidence measures for the latter part of July suggest possible downside risk to consensus forecasts.
Consensus: 64.0; Last: 63.8 (July prelim). MAP: 0
11:00: $2.5 - $3.0 billion POMO with Treasury buying bonds 01/31/2014-06/30/2015
15:15: St. Louis Fed President James Bullard and Atlanta Fed President Dennis Lockhart on monetary policy.
via GS, SMRA and ZH