Economists are projecting no change to a slight decline for tomorrow’s January update on personal consumption expenditures (PCE) vs. December. The consensus forecast via Econoday.com, for instance, is zero; Briefing.com’s survey of analysts expects a marginal loss. It all adds up to a good guess, based on last month’s release on retail sales, which slumped 0.8% in January. The positive spin is that headline spending is weak because of “falling gasoline sales in dollar terms,” as I discussed a few weeks ago, which is to say that the trend still looks encouraging after excluding spending at the pump—particularly on a year-over-year basis. That’s still my working assumption, in part because payrolls continue to rise at a robust pace. The main event for Monday will be deciding if the PCE data offers a different perspective.
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The ISM Manufacturing Index is expected to decline to 52.8 in tomorrow’s update (Mar. 2) for February vs. the previous month, based on The Capital Spectator’s median point forecast for several econometric estimates. The prediction is still above the neutral 50.0 mark and so the current outlook remains in moderate growth territory for this benchmark of economic activity in the US manufacturing sector.
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