Tuesday September 13 – TRADE BALANCE (July) | Global Insight: -$60.5bln | | Consensus: -$59.8bln | | Last Actual: -$58.8bln (June) |
What To Look For - The July trade deficit is expected to surge to over $60 billion.
- Solid retail sales in July likely pulled in imports at a very brisk rate.
- Oil import tab will jump due to the increase in crude oil prices.
Implications - The trade deficit, and the associated US external financing requirements, will continue to be a source of concern. The deficit trend continues to head higher - especially since gasoline imports will be rising sharply post-Katrina.
Tuesday September 13 – PRODUCER PRICE INDEX (August) | Total | | Global Insight: 1.3% | | Consensus: 0.7% | | Last Actual: 1.0% (July) |
| Core | | Global Insight: 0.1% | | Consensus: 0.1% | | Last Actual: 0.4% (July) |
What To Look For - Rising energy prices will drive top-level producer prices up sharply.
- Gasoline prices are expected to soar, increasing by more than 15%. Strong increases are also expected in fuel oil, liquefied petroleum gas, and utility rates.
- The core PPI is expected to rise by a relatively restrained 0.1%, aided by the recent (May through July) declines in non-energy import prices and flat prices for motor vehicle products.
Implications - The August report will continue the recent pattern of sharp increases in the top line index combined with a relatively flat core index. What is amazing is that the sharp increase in energy prices has not impacted the core index more forcefully in recent months. This pattern is expected to continue in September. Some relief on gasoline prices, and the top level index, however, is expected in the fourth quarter.
Wednesday September 14 – INDUSTRIAL PRODUCTION (August) | Total | | Global Insight: 0.4% | | Consensus: 0.3% | | Last Actual: 0.1% (July) |
What To Look For
- Motor vehicle production bounced back in August as July was held down by re-tooling and model changeovers.
- Other industries are expected to report a mixed month, but we expect to see some preliminary signs of reduced oil and gas production from the Gulf.
Implications - Prior to the impact of Katrina production momentum was mixed across the industries, but oil and gas production will be hammered downward in September. Other factors such as the Boeing strike suggest that September production could be weak in other industries.
Wednesday September 14 – RETAIL SALES (August) | Total | | Global Insight: -1.4% | | Consensus: -1.2% | | Last Actual: 1.8% (July) |
| Ex-Autos | | Global Insight: 0.9% | | Consensus: 0.5% | | Last Actual: 0.3% (July) |
What To Look For - Top line retail sales were pulled down by the sharp decline in auto sales.
- While ex-autos sales are expected to be up by 0.9%, this was mainly driven by a sharp increase in gasoline prices.
- Excluding autos and gasoline, retail sales are expected to eek out a slight gain.
Implications - Retail sales did not have much momentum in August, and the Hurricane is projected to knock out a couple of more table legs underpinning the key employment and disposable income drivers in September.
Thursday September 15 – CONSUMER PRICE INDEX (August) | Total | | Global Insight: 0.6% | | Consensus: 0.5% | | Last Actual: 0.5% (July) |
| Core | | Global Insight: 0.2% | | Consensus: 0.2% | | Last Actual: 0.1% (July) |
What To Look For - The gain in the core index is expected to be relatively modest, rising 0.2%.
- Repeating the pattern that we have send for several months, gasoline prices are expected to push the top-level index up fairly sharply.
Implications - Core inflation of near 0.2% would indicate that price pressures remain reasonably tame in spite of the sharp rise in energy prices that we have seen in the past several months. With the recent further increase in gasoline and natural gas prices in the aftermath of the Hurricane, the same pattern should be expected in the month of September. However, the more recent sharp decline in gasoline futures for the month of October suggests that some relief on gasoline prices is in store for the fourth quarter.
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