An economy more Clark Kent than Superman WASHINGT
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An economy more Clark Kent than Superman
WASHINGTON (MarketWatch) — A recent Newsweek magazine cover story argues that the economy is secretly Superman, but, at the same time, some economists are warning of a coming recession.
Would the real economy please stand up?
http://www.marketwatch.com/story/an-economy-m...2012-05-13
At the moment, economists don’t seem to know what to make of the start-and-stop nature of the data.
| date | report | Consensus | previous |
|---|---|---|---|
| May 15 | Retail sales | 0.0% | 0.8% |
| May 15 | Retail sales ex-autos | 0.0% | 0.8% |
| May 15 | Consumer price index | 0.0% | 0.3% |
| May 15 | Core CPI | 0.2% | 0.2% |
| May 15 | Empire state index | 10.0 | 6.6 |
| May 15 | Inventories | 0.4% | 0.6% |
| May 15 | Home builders’ index | 27 | 25 |
| May 16 | Housing starts | 689,000 | 654,000 |
| May 16 | Industrial production | 0.7% | 0.0% |
| May 16 | Capacity utilization | 79.1% | 78.6% |
| May 17 | Weekly jobless claims | 365,000 | 367,000 |
| May 17 | Leading indicators | 0.2% | 0.3% |
| May 17 | Philly Fed | 12.0 | 8.5 |
Steven Ricchiuto, chief economist of Mizuho Securities, recently compared the current state of the economy to a “sputtering but not stalling” British sports car.
“At any moment the economic engine could shut down and the recovery would falter,” Ricchiuto said.
“Alternatively, the problems keeping the engine from running smoothly could simply abate and a sustainable recovery could take hold,” he said.
The varied economic data to be released this week — with reports on retail sales, manufacturing, housing and inflation — may offer clues on what lies ahead.
The April retail sales report will be key to ascertaining the health the recovery, as consumer spending accounts for more than two-thirds of U.S. economic growth.
Economists surveyed by MarketWatch expect a soft report, with retail sales flat last month, after strong gains in the first three months of the year.
One factor in the deceleration is that April sales were soft at big retailers.
On the manufacturing front, economists are anticipating better results from factories after a series of downbeat reports..
wo factors were behind the recent softness in manufacturing, which had been the bright star of the recovery, economists say. One was that manufacturers rushed late last year to take advantage of expiring bonus depreciation tax breaks. In addition, inventories have risen sharply, leading to a cutback in capital spending.
Industrial production is expected to rise 0.7% in April after remaining flat in March.
Regional reports from factories in New York and Philadelphia are also expected to show improvement in May.
Meanwhile, the depressed housing market may show more hints of better days ahead.
Housing starts are expected to rebound by 5.5% to 690,000 in April, completely retracing the decline in the previous month. Permits rose sharply in March, a sign that builders are becoming more optimistic.
Home-builder sentiment is expected to rise in May after dropping last month for the first time in seven months.
Inflation should to moderate in April due to a drop in gasoline prices, analysts said.
The consumer price index is expected to be unchanged after rising 0.3% in March. Core prices are seen rising 0.2%, matching the March gain.
Mike Moran, chief economist at Daiwa Capital Markets America, said the week’s data will reflect an economy “doing a bit better than just muddling along.”
With activity held down by a debt-strapped consumer and weak state and local governments, things can only get better gradually, he said.
“It is not going to be a like turning on a light switch,” he said.
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