Saturday, March 29, 2014

Things to Watch on the Economic Calendar

By Kathleen Madigan

  • 1 This Payrolls Report Should Be Frost Free

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    Unlike the last three monthly employment reports, the March data , scheduled for release Friday, should be fairly clean of weather effects. Economists think job growth was better in March than in February. The consensus forecasts calls for a payroll gain just above 200,000 for March, better than the 175,000 jobs added in February.

    A reading even above the solid forecast number would confirm the growing sentiment that economic activity in the first quarter was slowed by the weather and stable fundamentals will support strong growth in the spring and beyond.

  • 2 Has the Participation Rate Stabilized?

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    One welcome development in recent months is the seeming stabilization of the labor force participation rate. After free-falling from 2009 through mid-2013, the share of working-age adults who are in the labor force—either working or looking for work—has held between 62.8% and 63.0% since October. Another 63% (or higher) reading in March would further suggest a stabilization.

    The retirement of aging baby boomers is cutting the rate, but perceptions of better job prospects may be drawing younger discouraged workers back into the labor pool. Indeed the labor-force participation rate among workers aged 25-34 years has rebounded more than one percentage point since October. That’s before the end of the extended jobless benefits program, so something more than the loss of public assistance is increasing the participation rate for younger adults.

  • 3 Vehicle Sales Should Rev Up

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    A major casualty of the harsh winter weather was vehicle sales. Sales in January and February averaged an annual rate of just 15.25 million, from an average of 15.5 million for all of 2013. On Tuesday, auto makers will report March sales. Forecasters think car-buying bounced back to about 15.8 million, helped by dealer incentives to get buyers into showrooms. Those deals should lift sales, but at the expense of profit margins.

  • 4 Taking Business’s Temperature in March

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    Winter drags also showed up in recent business surveys done by the Institute for Supply Management. The March reports covering manufacturers (out Tuesday) and non-manufacturers (Thursday) should be frost-free. Forecasters expect both surveys to look better than the February reports did.

    Since these reports come out ahead of Friday’s payrolls report, take time to look how the employment indexes performed. Economists think unusual movements in the ISM jobs indexes—whether up or down–can foreshadow a surprise in the payrolls number.

    Another area of interest is how manufacturers are managing their inventories. Although the inventory index is volatile,the latest numbers show manufacturers have been drawing down stockpiles in early 2014, confirming economists’ expectations that the inventory sector will subtract from first-quarter GDP growth.


    5 Oil Deficit Continues to Slide

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    The U.S. economy has been performing better than most of the rest of the world, but the growth differential has not triggered a sharp worsening in the U.S. trade deficit. One reason is the steep narrowing in the oil deficit. Thanks to greater domestic natural gas production and better energy efficiency, the U.S. is importing less oil than it did just a few years ago.

    After adjusting for prices, the petroleum trade deficit widened in January, but the moving average remains below $10 billion (in 2009 dollars). A look at the February oil trade will be available within the trade deficit report out Thursday.

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