Economic week ahead: SA retail sales

Retail figures from South Africa and the US, growth figures in Europe and Japan and a slew of data from China will dominate this week’s data calendar. Economists and investors will also keep an eye on situations in Ukraine and the Middle East along with the status of West Africa’s Ebola outbreak. Here is your guide.

Policymakers at Botswana’s central bank will announce their latest rates decisions on Tuesday.
Inflation in Botswana has remained within the central bank’s target band for 12 consecutive months and the country’s macroeconomic outlook remains healthy. Officials are likely to keep the bank’s benchmark policy rate on hold at 7.5% as a result.

On Wednesday, Nigeria’s information minister, Labaran Maku, and others will speak to reporters after their weekly cabinet meet. Questions about the spread of the Ebola virus in the region are likely to abound. 

Next up on Wednesday, Ghana will release July’s consumer price index (CPI) and Statistics South Africa (Stats SA) will release June’s retail sales figures. Economists at 4CAST expect South Africa’s release to show that consumer purchases slowed to 1.6% year-on-year growth from 2.4% in May.

June’s mining, wholesale and motor trade reports will follow from Stats SA on Thursday along with the South African Chamber of Commerce and Industry’s July trade conditions survey results.

Closing out the week on Friday, Namibia will release July CPI figures and South Africa’s Supreme Court of Appeal will hear an application by President Jacob Zuma seeking to overturn a high court ruling directing National Prosecuting Authority (NPA) chief Nomgcobo Jiba to hand over  certain tapes to the Democratic Alliance (DA). The NPA cited the tapes as one of the key reasons the authority dropped corruption charges against Zuma in 2009. The DA has been fighting a five-year battle to obtain the recordings.

United States
Tuesday’s small business optimism snapshot from the National Federation of Independent Businesses (NFIB) is the first significant item in America’s data diary this week. Markets expect the NFIB’s index to have rebounded to 95.8 after slipping 1.6 points to 95.0 in June.

On Wednesday, America’s latest retail sales figures will probably post a sixth consecutive monthly gain, providing more evidence of a second-quarter rebound in the world’s largest economy. Consensus is that sales rose 0.4% last month, the same rate of growth recorded in June.

Later in the day, commerce department data may show that business inventories rose 0.4% in June, down from 0.5% in May. Rising inventories can indicate optimism as companies build stock levels in anticipation of higher sales volumes. On Thursday, weekly jobless figures may show that the number of Americans filing for first time unemployment benefits rose to 295 000 in the week to August 9 from 289 000 in the previous week, a level just above the recovery low of 279 000 in the week of July 19.

On a busy Friday, attention will turn to July’s producer price inflation and industrial production updates along with preliminary August consumer sentiment data from the Thomson Reuters/University of Michigan monthly survey. Analysts expect improvements in both industrial output and consumer sentiment.

Industrial output likely climbed 0.3% from a month earlier, largely as a result of increased demand for business equipment and vehicles. August’s consumer sentiment index reading probably rose to 82.3 from 81.8 in June.

On Tuesday, Germany’s ZEW Institute’s closely followed economic sentiment indices are likely to show a decline for the eighth consecutive month. Perceptions of current conditions and expectations for the future are likely to show deterioration, consistent with other recently released data.

On Wednesday, the Bank of England will release its quarterly inflation report and updated economic forecasts and governor Mark Carney will hold a press conference. With employment, confidence and growth prospects all on the rise in Britain, speculation is mounting that a rates rise may come sooner than many previously expected.

More evidence of the country’s improving labour market is expected on Wednesday as well. Analysts expect the International Labour Organization unemployment rate fell to 6.4% in June from 6.5% in May and that the claimant count rate likely declined to 3.0% in July, the lowest level since September 2008.

On Thursday, economists expect second quarter eurozone growth figures to show that gross domestic product (GDP) expanded by a mere 0.1% in the three months to June, down slightly from 0.2% quarter-on-quarter growth in the first three months of the year.

German and French GDP figures are also scheduled for release on Thursday. Germany’s report may show that Europe’s largest economy stagnated in the second quarter. France, Europe’s number two economy, may also record zero growth.

China and Japan will dominate Asia’s economic calendar this week.

First up, on Tuesday, the Bank of Japan will release July’s corporate goods price index. Economists surveyed by Market News International expect the index to have risen 4.4% from a year earlier, the 16th consecutive rise for the price measure.

On Wednesday, China – the world’s number two economy – will release industrial production, retail sales and urban fixed investment data and Japan will announce its second quarter GDP. Markets expect China’s report to show that industrial output grew 9.2% from a year earlier in July, the same rate of growth recorded in June. Retail sales likely expanded 12.5%, year-on-year.

Japan’s data is likely to show that the country’s economy shrank 1.8%, quarter-on-quarter, in the April to June period. If confirmed, the second quarter of 2014 would be the first contraction in seven and the sharpest decline in growth since 2009. April’s sales tax hike and the ensuing pullback in consumer spending is largely behind the drop.

On Thursday, Japan’s cabinet officer will release June’s machinery orders tallies. Private sector core orders likely rose 16.7% from May, the first increase in three months. Orders will likely rise in the July to September quarter as companies replace equipment.

According to a survey conducted in June by the Development Bank of Japan, economists expect the country’s combined business investment to rise 15.1% from a year earlier in fiscal year 2014.

Matt Quigley

Matt Quigley

Matt Quigley writes the weekly economic preview for the Mail & Guardian. His blog on the South African economy can be found at Read more from Matt Quigley

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