Anticipating the menu of economic data scheduled during a given week, sometimes you get an over-the-top buffet line, or you can get a petite tasting plate. It is the latter this week.
The likely centerpiece of this week's offerings is January retail sales from the Commerce Department, due at 8:30 a.m. Eastern time Wednesday.
Economist David Wyss, an adjunct professor at Brown University, says that January retail sales likely rose 0.3 percent. He predicts that the January reading will be higher than that, excluding auto and gasoline sales. December came in with a gain of 0.5 percent.
Among the biggest headwinds facing the U.S. economy is the expiration of the payroll tax cut, which costs $1,000 a year to someone earning $50,000 annually. Because of that, Erik Johnson, economist with IHS Global Insight, says retail sales may be suffering a bit. While he would normally have expected January retail sales to be close to December's gain, expiration of the tax cut could create "a slight negative," he says.
As for the underlying momentum of the economy, Johnson says the United States continues to chug along at a modest pace. He notes negatives including destruction caused by Superstorm Sandy and uncertainty tied to budget policy in Washington. "It has been encouraging that consumers have still been spending in the face of these headwinds," Johnson says. "We see (gross domestic product) improving, trending up slowly." He's looking for a growth pace of 2 percent in the current quarter.
Let's review the data we've been dining on lately. As February began, we learned that hiring has been a bit more robust than we previously thought. The Labor Department revised upward November and December payrolls, or the number of jobs added by employers. Any celebration over that was mitigated by a since-discounted report showing slight contraction in GDP for the final quarter of 2012.
The first glance at quarterly GDP, or growth, is often revised in successive months. Economists, such as Diane Swonk of Mesirow Financial, Mark Vitner of Wells Fargo Securities and Ken Mayland of ClearView Economics, all now look for the fourth quarter GDP reading to be adjusted higher, so that a "plus" sign will replace the "minus" sign. They all cite confirmation of that after Friday's big drop in the December trade deficit. Simply put, we sent more overseas and brought fewer foreign-made items across our borders. Swonk wrote in a note that fourth-quarter GDP should be revised to up 0.7 percent, now that the December trade gap figures have been released.
On Friday, the Federal Reserve releases January industrial production figures at 9:15 a.m. EST. This monthly measure is a snapshot of output from factories, mines and utilities. Utility production is subject to big swings based on weather because of demand for heating in the winter and cooling in the summer.
Regarding the factory, or manufacturing trend, IHS Global Insight's Johnson says it has been fairly steady. "The longer-term story in manufacturing is it is just kind of chugging along. We haven't seen anything particularly impressive since early 2012." As he puts it, "we don't see a big surge any time soon."
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