3 Numbers: EU Business Mood Fragile; US Personal Income; US Home Sales
James Picerno | Mar 30, 2015 02:27AM ET
Monday’s a moderately busy day for economic news, including the first look at business sentiment data for March via the European Commission’s monthly estimate. Later, two US releases will provide more context for deciding if the nascent signs of stronger economic growth are the real deal. The key release is the monthly data on personal income and spending, followed by a leading indicator for the housing market: pending home sales figures from the National Association of Realtors.
estimate of first-quarter GDP for the Eurozone held on to its recent gains and inched up to 0.41% (quarter over quarter), the highest so far for the Q1 projection.
A 0.4% GDP gain, assuming it pans out, is still a tepid pace of growth. But at this stage the key issue is the directional change and its persistence. For the moment, the trend looks mildly promising. If Now-Casting.com’s prediction holds, the advance will mark the third straight quarter of improvement and the strongest quarterly gain since 2011.
A brighter mood among consumers for the Eurozone overall has been anticipating a degree of macro revival. Consumer confidence in March rose to its highest level since 2007, according to flash data recently published by the European Commission (EC). Today’s release will deliver revised consumer numbers, along with the first look at the business survey figures for this month. The key question: will sentiment in the business sector show some of the optimism that's been bubbling among consumers?
As the chart below shows, the mood in European’s commercial sector has yet to confirm the recent gains in consumer sentiment. That’s a sign that the recent improvement in the macro profile is still a precarious affair. A solid rise in today’s update of the Business Climate Indicator for March would certainly help strengthen optimism, although even a slight rise from last month’s 0.07 would be productive at this point. Otherwise, if the business sector's outlook remains sluggish, doubts will linger about the recovery's stamina.
PriceStats data, which has posted a dramatic turnaround in recent weeks. Today’s February inflation figures in the spending and income report aren’t likely to show much change from the last release, however. Core PCE, which excludes energy and food, is on track to rise 0.1% on a monthly basis, according to Briefing.com's consensus forecast – unchanged from the pace in the previous update.
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Personal income's 0.3% monthly gain is expected to hold in today's report too. The key change, according to economists, is the revival in consumption: a monthly increase of 0.2%. That's still sluggish, but if the forecast holds, it'll mark the first monthly gain for consumer spending since last November.
advised that he’s still anticipating that 2015 will mark the “best year for home sales and new home construction since 2007.” Is that forecast still a reasonable guesstimate? Today's pending home sales data will offer a new clue.
Disclosure: Originally published at Saxo Bank TradingFloor.com
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