Economic week ahead: SA data, US jobs, EU rates

Economists and investors will be on the lookout for manufacturing PMI, employment, money supply, credit extension and trade data from SA this week. (Flickr)

Economists and investors will be on the lookout for manufacturing PMI, employment, money supply, credit extension and trade data from SA this week. (Flickr)

Economists and investors will be on the lookout for manufacturing purchasing managers’ index (PMI), employment, money supply, credit extension and trade data from SA this week.

Elsewhere in the world, jobs data from America, a rates decision in Europe and an update on China’s manufacturing sector will dominate. Here is your guide. 

South Africa’s data week will begin with second quarter employment statistics – including job growth and earnings information – on Monday. Statistics South Africa postponed the release, which had been scheduled for last week. On Tuesday, attention will turn to the South African Reserve Bank’s release of August money supply and private sector credit extension data and the South African Revenue Service’s preliminary report of August trade figures.

Markets expect money supply growth to have slowed to 6.8% growth from a year earlier in August from 7.26% in July.
Private sector credit extension, however, likely picked up to 9% year-on-year growth from 8.63% in the prior month. South Africa’s trade deficit, meanwhile, may have swelled to R7.5-billion in August from R6.9-billion July. 

On Wednesday, attention will turn to the Bureau for Economic Research for the release of South Africa’s latest manufacturing PMI readings. South Africa’s PMI rose from 45.9 in July to 49.0 in August, just below the 50-mark separating expansion from contraction. Markets will be watching to see if the headline index can breakthrough this week. Many analysts expect it will, barely.

Elsewhere on the continent, Angola’s central bank will announce September’s benchmark policy rate decisions on Monday. 

Kenya, Namibia and Morocco will release money supply figures on Monday or Tuesday.  On Tuesday, Morocco, Kenya and Mauritius will release second quarter gross domestic product figures. Kenya and Uganda will report September’s consumer price inflation. And Nigeria – Africa’s largest economy – will release second quarter trade balance data.

United States
On Monday, the United States commerce department will release last month’s personal income and outlays (spending) data. The report is likely to show a rebound in consumer spending, which accounts for roughly 70% of America’s economy. Outlays probably rose 0.5% in August after falling 0.1% in July. Personal income likely rose 0.3% over the same period.  

On Tuesday, the Conference Board’s September consumer confidence report will take centre stage. Analysts expect the headline index, which is based on consumer’s perceptions of current business and employment conditions, to remain near a seven-year high. Midweek, economists expect the Institute for Supply Management’s manufacturing index, which jumped to 59.0 in August, to give back some ground. Consensus calls for a pull-back to 58.0, still well-above the 50-mark separating expansion from contraction. 

Also on Wednesday, Autodata Corporation’s latest vehicle sales tally is widely expected to show that the pace of domestic and total vehicle sales growth slowed in September after accelerating markedly in August. 

Closing out the week on Friday, the Bureau of Labor Statistics will release September’s employment situation report. Showing a gain of only 142 000 positions, the weakest pace of the year, August’s jobs report was disappointing. Consensus calls for a 215 000 rise in nonfarm payrolls in September, resulting in no change to America’s 6.1% unemployment rate. 

Eurozone consumer, business and economic sentiment gauges will kick-off Europe’s data week on Monday. Analysts widely expect the indices to remain largely unchanged in negative territory. The region’s business climate index likely slipped to 0.12 in September from 0.16 in August. 

On Tuesday, attention will turn to Germany – Europe’s largest economy – for the country’s latest employment figures. Economists anticipate no change to the 6.7% unemployment rate last reported in August. Germany’s job market has remained remarkably steady, despite a surprise economic contraction in the second quarter and waning consumer and investor confidence. 

On Wednesday, United Kingdom Prime Minister David Cameron will deliver his keynote address to the Conservative Party’s annual conference in Birmingham, the last before next year’s general election. Cameron is widely expected to focus much of his speech on the Tory’s plans for Britain’s economy.

On Thursday, the European Central Bank (ECB)’s governing council will gather in Naples for a policy meeting. No change to the bank’s benchmark rates is expected. President Mario Draghi’s post-meeting press conference will nevertheless be closely watched for details on the ECB’s plans to purchase asset-backed securities and covered bonds.  

Also on Thursday, the Bank of England’s financial policy committee will publish a statement following its quarterly meeting which wrapped-up last week Friday. Policymakers set limits on the riskiest mortgages at their June meeting.

Japan will release a slew of August data on Tuesday, including unemployment, industrial production, retail sales and housing starts.  Economists surveyed by Market News International suspect Japan’s unemployment rate (3.8%) and ratio of job offers to job seekers (1:10) both held steady in August. Industrial production may have climbed 0.2% from July, led by higher chemical and electronic output. 

Household spending may have fallen 3.6% from a year earlier, marking a fifth consecutive year on year drop following July’s 5.9% decline. Retail sales likely rose 0.3% from a year earlier following July’s 0.6% year on year gain. Consensus calls for a 13.2% year-on-year decline in housing starts to an annualized rate of 833 000 units. New housing orders have fallen, year on year, in every month from February.  On Wednesday, China – the world’s number two economy – will begin its “Golden Week” holiday. 

Running from October 1 through October 7, the National Day celebrations are the second-longest on the country’s official calendar after the Spring Festival. As festivities kick-off, markets around the world will be waiting anxiously for China’s official manufacturing PMI. Analysts surveyed by Reuters anticipate Wednesday’s release to show a headline reading of 51.2, a slight improvement on August’s 51.1.

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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