Economy Week Ahead: Eurozone PMI, Durable Goods, Household Spending
September 22 2019 - 4:26PM
Dow Jones News
By WSJ Staff
In the week ahead, the U.S. Commerce Department releases fresh
figures on new-home sales, durable goods and household spending.
The eurozone issues figures on activity at factories and service
providers, and China releases data on industrial profits.
Monday: The eurozone publishes manufacturing and services survey
data. The figures are expected to point to steady growth in
activity during September, while indicating the services sector
weakened even as the decline in manufacturing activity slowed.
Economists expect the composite purchasing managers index -- which
aggregates measures of activity for factories and service providers
-- to rise to 52.0 from 51.9 in August, pointing to a continued
expansion, albeit at a modest pace. However, they expect the
services measure to fall to 53.3 from 53.5, while the manufacturing
index is seen edging up to 47.2 from 47.0. A reading below 50.0
points to a decline in activity.
Wednesday: The Commerce Department releases figures on new-home
sales for August. Americans bought fewer newly built homes in July
than during the previous month, despite a decline in mortgage
rates. Economists expect a 3.8% increase in this week's report,
which will shed light on whether lower rates are enticing more
buyers and how concerns over limited housing inventory are playing
out in the market for new homes. The housing market overall has
been showing modest signs of a pickup, after underperforming the
broader economy for more than a year. U.S. housing starts and
existing home sales saw strong gains in August.
Friday: The Commerce Department issues figures on August
durable-goods orders and household spending. Economists expect
orders for durable goods -- manufactured products intended to last
at least three years -- decreased by 1.2% in August from a month
earlier. In July, orders rose 2.0%. The latest durable-goods data
come as other recent figures have indicated a global manufacturing
slowdown. In August, a key measure of U.S. factory activity
contracted for the first time in three years.
Economists estimate U.S. household spending increased 0.3%
during August, which would represent continued strength in consumer
activity, while other segments of the economy -- namely business
investment and manufacturing -- have been slowing. In July,
household spending rose by 0.6%.
China releases data on profits at large industrial firms.
Economists expect industrial earnings growth to remain sluggish, a
major policy concern. Upstream players are struggling with falling
prices due to soft demand, although consumer-goods producers are
benefiting from rising food prices. If companies aren't making
money, they will not only cut down on investment and production,
but they will probably also cut wages. That is something Beijing
doesn't want to see.
(END) Dow Jones Newswires
September 22, 2019 16:11 ET (20:11 GMT)
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