March Numbers Should Show Solid Results

Apr 01, 2019
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March Numbers Likely to Show Solid Results

This week will be where hard numbers start to replace rumor, speculation, and anecdotal reports as to the state of the economy. The first-tier releases will be headlined by Friday’s employment report which is expected to show a rebound off the weather-influenced weakness in February. Meanwhile, ISM reports will give us a look at the manufacturing and services sectors for March. Both are expected to be decent reports with little hint of slowdowns. February retail sales are due this morning with a mostly solid read expected. February durable goods numbers are due tomorrow and they are also expected to be solid. Surrounding the dose of data will be the ongoing fallout of the failed Brexit vote. May’s plan failed for a third time last Friday and now the  House of Commons is charged with crafting a plan that will pass Parliament before the just-extended April 12th deadline. What’s more, Theresa May’s tenure as prime minister appears to be nearing an end and that will only add to the intrigue and uncertainty.



Short-Term Rates

Short-term Rates

Economic Calendar

Economic Calendar


calendar icon Top 5 Events for the Week

APR 1 - 5, 2019

1.  March Employment Report – Friday
2.  February Retail Sales – Monday
3.  February Durable Goods Orders – Tuesday        
4.  March ISM Reports — Monday/Thurs.
5.  Brexit Vote Fallout — All Week



1.  March Employment Report – Friday

This Friday’s March jobs report is likely to show a  rebound in the headline number versus February’s weak winter-impacted results.  The headline number is expected to bounce back to a near trend 180k gain versus 20k print the prior month. Other metrics within the report are more or less calling for a solid read on the labor market. The unemployment rate is expected to stay at 3.8% for a second straight month after creeping up to 4.0% in January.  Wage gains are expected to dip 2/10ths to 0.2% for the month but YoY wage gains are expected to remain solid at 3.4% for a second straight month. In summary, if the report comes as expected it will show a labor market that rebounded in March from a one-off weather-influenced headline miss and continues to trend positively through all the market and geopolitical volatility.


2.  February Retail Sales – Monday

Ever since the strikingly weak December retail sales numbers there has been a general expectation that the consumer would come back in force and demonstrate a willingness to spend like a drunken sailor. While the January retail sales numbers did bounce in spots they didn’t make up for the dreadful December. Meanwhile, February’s numbers are expected to show more of the same.  The all-important control group reading (which is a direct GDP input) is expected to post a 0.3% gain versus 1.1.% in January while overall sales are expected up 0.3% versus 0.2% the prior month.  Sales ex-autos & gas are expected up 0.3% but that’s well off the 1.2% in January. In summary, a more normal looking report is expected, and one that doesn’t hint at the consumer going into a shell, but it’s not likely to show that the U.S. consumer has returned to his/her profligate spending ways either.


3.  February Durable Goods Orders – Tuesday

The headline orders number is expected to be down –1.8% versus a 0.3% gain in January while durable orders less  the volatile transportation sector are expected to be up 0.3% versus –0.2% the prior month. Shipments of goods less defense and air— a proxy for  business investment—are expected to be up 0.8% matching the gain in January.  In summary, away from the volatile transportation sector, a decent read is expected which should quiet any budding recession fears.


4.  March ISM Reports — Monday/Thursday

Along with this week’s jobs report the two ISM readings will give us another tell on March activity.  The forecast for March manufacturing is expected to print a 54.4 versus 54.2 in February but below the 12-month average of 58.0. Expectations are for the ISM services sector to print a 58.0 versus 59.7 in January.  The average over the past year has been 58.7 so a slight decrease from the average but a solid result nonetheless is expected. The continued moderation in manufacturing is most likely attributable to the third and fourth quarter inventory overbuild that was noted in fourth quarter GDP.  In summary, however, both ISM reports are expected to show continued expansion with little, if any, sign of concerning slippage in activity.


ISM Manufacturing and Non-Manufacturing


5. Brexit Development — All Week

With Prime Minister Theresa May’s Brexit plan failing in Parliament for a third time last Friday the uncertainty over what happens to the Brexit issue is one thing and what happens to the prime minister is another. In most quarters it seems a given that she will resign and a new government formed; whether that happens before the House of Commons can fashion a Brexit agreement that can muster a majority before the April 12th deadline is another matter. Welcome to the world of U.K. politics and government, as they say, it’s a bloody mess. We shall all watch what happens next, but for now the mess is only getting bigger and not going away anytime soon. That will keep the global uncertainty trade in high gear at least for another couple weeks it seems.




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 Source: Bloomberg





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Thomas R. Fitzgerald

Director, Strategy & Research



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