Key Events This Week: Payrolls, Retail Sales, ISM, Beige Book... And War In Iran

Outside the obvious and huge attention on the Middle East, the key focus this week will be on the US jobs report on Friday, retail sales on the same day, the ISM indices (today and Wednesday), and the Fed’s Beige Book, also due on Wednesday. European releases will include inflation data tomorrow and the ECB’s accounts of their February meeting on Thursday. Various global PMIs are also out this week.
In politics, highlights include the Two Sessions in China as well as the Spring Statement in the UK. Earnings reports will be due from Costco and Broadcom.

Delving deeper into the US data, the most important release in the week ahead is Friday’s February employment report. DB economists forecast headline payroll growth of 30k, down from 130k previously, with private payrolls rising by 50k after January’s unusually strong 172k gain. The moderation largely reflects payback from outsized hiring last month in private education and health services and construction, where job gains more than doubled their six month averages. Elsewhere in the establishment survey, economists expect average hourly earnings to rise 0.4% month over month, unchanged from January, while the average workweek remains steady at 34.3 hours.

The household survey adds an additional layer of uncertainty this month, as the BLS implements its delayed annual population controls. DB's economists forecast the unemployment rate at 4.3%, though risks around this estimate are elevated in both directions. January data will also be revised using the new controls, and attention will be focused on whether these adjustments meaningfully alter unemployment rates across demographic groups, particularly among younger cohorts, where concerns around entry level hiring remain heightened.

Friday also brings January retail sales, where weather related weakness in auto sales is likely to weigh on the headline figure. DB economists expect headline sales to decline 0.6%, with sales excluding autos down 0.1%, partly reflecting lower gasoline prices. That said, retail control sales are forecast to rebound by 0.3%, pointing to a firmer underlying pace of goods consumption. Tax refunds should provide additional support to spending in coming months, with the average refund running meaningfully higher than a year ago.

Ahead of Friday, several other releases will help set the tone. Today’s manufacturing ISM is expected to edge up to 53.3 from 52.6. Wednesday brings the ADP employment report, forecast at 50k (though seasonals might push it higher), alongside the non manufacturing ISM, seen at 54.0.

Other notable data include February unit motor vehicle sales tomorrow, which is expected at 15.1 million, potentially restrained again by adverse weather. Thursday’s preliminary Q4 productivity and unit labor cost figures are forecast at 1.3% and 2.2%, respectively.

Moving to Europe, the focus will continue to be on inflation, with February prints due for the Eurozone and Italy tomorrow, Switzerland on Wednesday, and Sweden on Thursday. ECB speakers will include President Lagarde today, and the central bank will release the accounts of its February meeting on Thursday. 

In the UK, attention will be on the Spring Statement delivered by the Chancellor tomorrow, and our UK economist previews it here. There will also be the February DMP survey from the BoE on Thursday.

Over in Asia, the spotlight will be on China’s annual Two Sessions starting Wednesday (running through March 11), followed by the National People’s Congress session opening on Thursday, with the 15th Five Year Plan expected. Elsewhere, data highlights will include the February PMIs, both the official and private gauges, in China on Wednesday.

In Japan, the Shunto wage demands due on Thursday are the most anticipated event next week and expects wage demands this year to come in at 6.0%. There will also be the Financial Statements Statistics of Corporations (MoF survey) for Q4 on Tuesday, as well as the February consumer sentiment index on Wednesday.  

Earnings will include tech firms Broadcom, CrowdStrike and Marvell. US consumer firms will continue to be in focus, with reports from Costco and Target.

Courtesy of DB, here is a day-by-day calendar of events

Monday March 2

• Data: US February ISM manufacturing, UK January net consumer credit, M4, Germany January retail sales, Italy February manufacturing PMI, new car registrations, Canada February manufacturing PMI
• Central banks: ECB's Lagarde, Nagel and Stournaras speak, BoJ's Himino speaks, BoE's Taylor speaks, BoC’s Kozicki speaks
• Earnings: AST SpaceMobile, EchoStar, Venture Global, Norwegian Cruise Line

Tuesday March 3

• Data: US February total vehicle sales, Japan January jobless rate, job-to-applicant ratio, February monetary base, Q4 Ministry of Finance survey, France January budget balance, Eurozone February CPI, Italy February CPI
• Central banks: Fed's Williams and Kashkari speak, ECB's Kocher and Sleijpen speak
• Earnings: Crowdstrike, Thales, AutoZone, Target, ASM, Kuehne + Nagel, On Holding, Gitlab
• Other: UK Spring Statement

Wednesday March 4

• Data: US February ISM services, ADP report, UK February official reserves changes, China February PMIs, Japan February consumer confidence index, Italy February services PMI, January unemployment rate, Eurozone January PPI, unemployment rate, Canada Q4 labor productivity, February services PMI, Switzerland February CPI, Australia Q4 GDP
• Central banks: Fed’s Beige Book, ECB's Muller, Cipollone, Villeroy and Guindos speak, BoC’s Macklem speaks
• Earnings: Broadcom, Bayer, adidas, Veeva, Okta, Davide Campari-Milano
• Other: China’s Two Sessions start

Thursday March 5

• Data: US January import price index, export price index, Q4 nonfarm productivity, Q4 unit labor costs, initial jobless claims, UK February new car registrations, construction PMI, Germany February construction PMI, France January industrial production, Italy January retail sales, Eurozone January retail sales, Sweden February CPI
• Central banks: ECB’s accounts of the February meeting, ECB's Lagarde, Guindos, Rehn and Nagel speak, BoE’s February DMP survey 
• Earnings: Costco, Petroleo Brasileiro, Marvell, Deutsche Post, Reckitt Benckiser, Ciena, Galderma, Kroger, Universal Music Group
• Other: China’s NPC’s session starts

Friday March 6

• Data: US February jobs report, US Retail Sales, January consumer credit, Germany January factory orders
• Central banks: Fed's Hammack speaks, ECB's Cipollone and Schnabel speak

* * * * *

Finally, looking at just the US, Goldman writes that the key economic data releases this week are the retail sales report and the employment report on Friday. There are several speaking engagements by Fed officials this week, including an event with New York Fed President Williams on Tuesday.

Monday, March 2 

• 09:45 AM S&P Global US manufacturing PMI, February final (consensus 51.4, last 51.2) 
• 10:00 AM ISM manufacturing index, February (GS 51.0, consensus 51.5, last 52.6): We estimate that the ISM manufacturing index declined by 1.6pt to 51.0 in February, reflecting reversion after an outsized increase in the prior month. Our manufacturing survey tracker edged up by 0.1pt to 52.4.

Tuesday, March 3 

• 09:55 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will give keynote remarks at America’s Credit Union Government Affairs conference in Washington DC. Speech text and Q&A are expected.
• 11:55 AM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Minneapolis Fed President, Neel Kashkari, will participate in a conversation with Mike McKee at the Bloomberg Invest conference in New York City. Q&A is expected. On January 5, Kashkari said, “My guess is we are pretty close to neutral right now.” He added that “we just need to get more data to see [whether inflation or the labor market] is the bigger force, [and] then we can move from a neutral stance to whatever direction is necessary.”
• 05:00 PM Lightweight motor vehicle sales, February (GS 15.6mn, consensus 15.4mn, last 14.9mn)

Wednesday, March 4 

• 08:15 AM ADP employment change, February (GS +50k, consensus +50k, last +22k)
• 09:45 AM S&P Global US services PMI, February final (consensus 52.3, last 52.3) 
• 10:00 AM ISM services index, February (GS 53.5, consensus 53.5, last 53.8): We estimate that the ISM services index edged down by 0.3pt to 53.5 in February, reflecting a decline in our non-manufacturing survey tracker (-1.3pt to 52.0) but a tailwind from potential residual seasonality.
• 02:00 PM Fed Releases Beige Book, March meeting period: The Fed’s Beige Book is a summary of regional economic anecdotes from the 12 Federal Reserve districts. The Beige Book for the January FOMC meeting period noted that overall economic activity increased at a slight to modest pace in eight of the twelve Federal Reserve Districts, with three Districts reporting no change and one reporting a modest decline, marking an improvement over the last three reports. In this month’s Beige Book, we will look for anecdotes related to the evolution of labor demand and firms’ expectations of activity growth for the remainder of the year.

Thursday, March 5 

• 08:30 AM Import price index, January (consensus +0.3%, last +0.1%) 
• 08:30 AM Nonfarm productivity, Q4 preliminary (GS +2.2%, consensus +1.8%, last +4.9%): Unit labor costs, Q4 preliminary (GS +2.4%, consensus +2.0%, last -1.9%)
• 08:30 AM Initial jobless claims, week ended February 28 (GS 215k, consensus 215k, last 212k): Continuing jobless claims, week ended February 21 (consensus 1,845k, last 1,833k)

Friday, March 6 

• 08:30 AM Nonfarm payroll employment, February (GS +45k, consensus +60k, last +130k); Private payroll employment, February (GS +45k, consensus +70k, last +172k); Average hourly earnings (MoM), February (GS +0.3%, consensus +0.3%, last +0.4%); Unemployment rate, February (GS 4.4%, consensus 4.3%, last 4.3%): We estimate nonfarm payrolls increased 45k in February. On the negative side, we expect a 31k drag from newly striking workers and a modest headwind from poor winter weather after it likely boosted January payroll growth. Additionally, we expect unchanged government payrolls—reflecting a 5k decline in federal government payrolls that is offset by a 5k increase in state and local government payrolls. The big data indicators of job growth we track were mixed in February. On the positive side, the pace of layoffs remained subdued and online measures of job openings stabilized. We estimate that the unemployment rate edged up to 4.4% in February. While other measures of labor market tightness improved slightly on net, the February unemployment rate appears to suffer from positive residual seasonality (the unrounded unemployment rate has increased in each of the last three Februarys by an average of 0.15pp). The report will be accompanied by updated population controls, which are likely to lead to downward revisions to the level of the population, labor force, and household employment. The impact on ratios in the survey (e.g., the unemployment rate and labor force participation rate) is likely to be negligible. We estimate average hourly earnings rose 0.3% month-over-month in February, reflecting neutral calendar effects.
• 08:30 AM Retail sales, January (GS -0.1%, consensus -0.3%, last flat); Retail sales ex-auto, January (GS +0.1%, consensus flat, last flat); Retail sales ex-auto & gas, January (GS +0.3%, consensus +0.2%, last flat); Core retail sales, January (GS +0.5%, consensus +0.3%, last -0.1%): We estimate core retail sales increased 0.5% in January (ex-autos, gasoline, and building materials; month-over-month SA), reflecting solid alternative data and a tailwind from potential residual seasonality. We estimate headline retail sales declined 0.1%, reflecting a decline in auto sales and lower gasoline prices.
• 10:15 AM San Francisco Fed President Daly (FOMC non-voter) and Philadelphia Fed President Paulson (FOMC voter) speak: San Francisco Fed President Mary Daly and Philadelphia Fed President Anna Paulson will discuss private sector data at the US Monetary Policy Forum held by the University of Chicago Booth School of Business in New York City. Text and Q&A are expected. On February 17, Daly said, “The Fed has roughly 75bps to go until getting to neutral…the policy stance now is modestly or slightly restrictive.”
• 01:30 PM Cleveland Fed President Hammack (FOMC voter) speaks: Cleveland Fed President Beth Hammack will participate in a panel discussion on the dollar’s safe-haven status at the US Monetary Policy Forum in New York City. Text and Q&A are expected. On February 10, Hammack said, “Rather than trying to fine-tune the fed funds rate, I’d prefer to err on the side of patience as we assess the impact of recent rate reductions and monitor how the economy performs.” She also noted, “Based on my forecast, we could be on hold for quite some time.”

Soruce: DB, Goldman