The Week Ahead: Highlights

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US Personal Income, Spending, PCE Prices Highlight Week

By Theresa Sheehan, Econoday Economist

The January 19 week is part of the communications blackout period around the next FOMC meeting on January 27-28. The blackout goes into effect at midnight on Saturday, January 17 and lasts through midnight on Thursday, January 29. Fed officials will not comment on monetary policy during this period absent a compelling reason such as financial market instability.

The week also begins with a federal holiday on Monday for the observance of the M.L. King, Jr. birthday. This is a full market close for bonds and stocks in the US.

There is little economic data of importance in the week, especially which could affect the outcome of the FOMC meeting.

The updated estimate for third quarter GDP at 8:30 ET on Thursday will probably see larger than usual revisions to the 4.3 percent increase in the initial estimate (combined advance and second estimate). However, at this point the report is sufficiently out of date to have little market impact. More important is that early forecasts for the fourth quarter expect moderate growth to continue despite the impact of the shutdown. The New York Fed's Staff Nowcast as of January 9 expects growth at 2.61 percent. The St. Louis Fed's Real GDP Nowcast is for negative growth of 0.35 percent. The Atlanta Fed's GDPNow - the most accurate forecast over time - anticipates growth of 5.3 percent. An average of the three puts fourth quarter growth around 2.5 percent.

The report on personal income and spending for November is at 10:00 ET on Thursday. It will provide the FOMC with a more current reading of its preferred measure of inflation --- the PCE deflator - with numbers for October and November. This will be a welcome update for the FOMC as it will have a more complete and up to date set of reports on which to make its next monetary policy decision. Unlike the CPI, there should be no gaps in the monthly data.

The Week Ahead: Econoday Consensus Forecasts

Monday

Japan Machinery Orders for November (Mon 0850 JST; Sun 2350 GMT; Sun 1850 EST)

Consensus Forecast, M/M: -8.4%

Consensus Range, M/M: -9.4% to -4.9%

Consensus Forecast, Y/Y: 1.0%

Consensus Range, Y/Y: -0.5% to 5.8%

Japan's core machinery orders, a key leading indicator of business investment in equipment and software, are expected to decline on the month in November for the first time in three months, reflecting a reactionary pullback following the unexpected sharp rebound in orders from the transportation and postal services sectors in the previous month.

Core machinery orders are forecast to fall 8.4 percent on the month in November, after unexpectedly jumping 7.0 percent in October. On a year-on-year basis, core orders, excluding those from electric utilities and for ships, are expected to rise for the 14th consecutive month to 1.0 percent, but sharply lower from a 12.5 percent increase in October.

China Fixed Asset Investment for December (Mon 1000 CST; Mon 0200 GMT; Sun 2100 EST)

Consensus Forecast, Year to Date on Y/Y Basis: -2.95%

Consensus Range, Year to Date on Y/Y Basis: -3.1% to -2.8%

Still shocking to see declines in this series after so many years of regular big gains. After an ugly loss of 2.6 percent in November, the December call looks for an even bigger decrease of 2.95 percent.

China GDP for Fourth Quarter (Mon 1000 CST; Mon 0200 GMT; Sun 2100 EST)

Consensus Forecast, Q/Q: 1.1%

Consensus Range, Q/Q: 0.8% to 1.2%

Consensus Forecast, Y/Y: 4.5%

Consensus Range, Y/Y: 4.2% to 4.8%

Growth seen at 1.1 percent on the quarter and 4.5 percent on year for Q4 versus 1.1 percent and 4.8 percent in Q3.

China Industrial Production for December (Mon 1000 CST; Mon 0200 GMT; Sun 2100 EST)

Consensus Forecast, Y/Y: 5.0%

Consensus Range, Y/Y: 4.9% to 5.4%

The consensus sees output up 5.0 percent on year after rising 4.8 percent in October.

China Retail Sales for December (Mon 1000 CST; Mon 0200 GMT; Sun 2100 EST)

Consensus Forecast, Y/Y: 1.0%

Consensus Range, Y/Y: 0.8% to 1.2%

Forecasters expect sales up a very modest 1.0 percent on year after an already unimpressive 1.3 percent in November.

Eurozone HICP for December (Mon 1100 CEST; Mon 1000 GMT; Mon 0500 EST)

Consensus Forecast, HICP - M/M: 0.2%

Consensus Range, HICP - M/M: 0.2% to 0.2%

Consensus Forecast, HICP - Y/Y: 2.0%

Consensus Range, HICP - Y/Y: 2.0% to 2.0%

Consensus Forecast, Narrow Core - M/M: 0.3%

Consensus Range, Narrow Core - M/M: 0.3% to 0.3%

Consensus Forecast, Narrow Core - Y/Y: 2.3%

Consensus Range, Narrow Core - Y/Y: 2.3% to 2.3%

Forecasters see no revision from the flash with HICP up 0.2 percent on month and 2.0 percent on year.

Canada CPI for December (Mon 0830 EST; Mon 1330 GMT)

Consensus Forecast, M/M: -0.4%

Consensus Range, M/M: -0.4% to -0.1%

Consensus Forecast, Y/Y: 2.2%

Consensus Range, Y/Y: 2.1% to 2.2%

CPI expected down 0.4 percent on month in December and up 2.2 percent on year after gains of 0.1 percent and 2.2 percent in November.

China Loan Prime Rate for January (Mon 0915 CST; Mon 0115 GMT; Mon 2015 EST)

Consensus Forecast, 1-Year Rate - Change: 0 bp

Consensus Range, 1-Year Rate - Change: 0 bp to 0 bp

Consensus Forecast, 1-Year Rate - Level: 3.00%

Consensus Range, 1-Year Rate - Level: 3.00% to 3.00%

Consensus Forecast, 5-Year Rate - Change: 0 bp

Consensus Range, 5-Year Rate - Change: 0 bp to 0 bp

Consensus Forecast, 5-Year Rate - Level: 3.50%

Consensus Range, 5-Year Rate - Level: 3.50% to 3.50%

With no signals from the PBOC, the consensus sees no change in LPR.

Tuesday

UK Labour Market Report for January (Tue 0700 GMT; Tue 0200 EST)

Consensus Forecast, ILO Unemployment Rate: 5.1%

Consensus Range, ILO Unemployment Rate: 5.0% to 5.1%

Consensus Forecast, Average Earnings - Y/Y: 4.6%

Consensus Range, Average Earnings - Y/Y: 4.5% to 4.6%

The ILO jobless rate expected unchanged in December from 5.1 percent in November. Earnings including bonus are seen up 4.6 percent after 4.7 percent in November,

Germany PPI for December (Tue 0800 CET; Tue 0700 GMT; Tue 0200 EST)

Consensus Forecast, M/M: -0.1%

Consensus Range, M/M: -0.3% to 0.1%

Consensus Forecast, Y/Y: -2.4%

Consensus Range, Y/Y: -2.8% to -2.1%

No letup in wholesale price deflation seen with a decline of 2.4 percent on year expected for December.

Germany ZEW Survey for January (Tue 1000 CET; Tue 0900 GMT; Tue 0400 EST)

Consensus Forecast, Current Conditions: -76.0

Consensus Range, Current Conditions: -80.0 to -74.1

Consensus Forecast, Economic Sentiment: 50.0

Consensus Range, Economic Sentiment: 35.0 to 55.0

Current conditions seen better at minus 76.0 for January versus minus 81.0 in December. Sentiment expected at 50 versus 45.8 in December

Wednesday

UK CPI for December (Wed 0700 GMT; Wed 0200 EST)

Consensus Forecast, M/M: 0.3%

Consensus Range, M/M: 0.2% to 0.4%

Consensus Forecast, Y/Y: 3.3%

Consensus Range, Y/Y: 3.1% to 3.4%

UK annual inflation seen at 3.3 percent in December after 3.2 percent in November. Month on month, the consensus looks for an increase of 0.3 percent after a 0.2 percent decrease in November.

US Construction Spending for September (Wed 1000 EST; Wed 1500 GMT)

Consensus Forecast, M/M: -0.1%

Consensus Range, M/M: -0.1% to 0.2%

Forecasters a decline of 0.1 percent on the month, in keeping with continuing sluggishness in the sector.

US Construction Spending for October (Wed 1000 EST; Wed 1500 GMT)

Consensus Forecast, M/M: 0.1%

Consensus Range, M/M: 0.0% to 0.1%

Another month of marginal growth seen with spending up 0.1 percent in October after rising 0.2 percent in September.

Thursday

South Korea GDP for Fourth Quarter (Thu 0800 KST; Thu 2300 GMT; Thu 1800 EST)

Consensus Forecast, Q/Q: 0.3%

Consensus Range, Q/Q: 0.2% to 0.3%

Consensus Forecast, Y/Y: 1.8%

Consensus Range, Y/Y: 1.5% to 2.0%

Growth seen up 0.3 percent on the quarter and seen up 1.8 percent on year Q4 after rising by 1.3 percent on quarter and 1.8 percent on the year in Q3.

Japan Merchandise Trade for December (Thu 0850 JST; Thu 2350 GMT; Thu 1850 EST)

Consensus Forecast, Balance: ¥331.25 B

Consensus Range, Balance: ¥240.00 B to ¥410.80 B

Consensus Forecast, Imports - Y/Y: 4.2%

Consensus Range, Imports - Y/Y: 2.2% to 5.6%

Consensus Forecast, Exports - Y/Y: 6.2%

Consensus Range, Exports - Y/Y: 5.1% to 7.6%

Japan's export values are projected to increase 6.2 percent on the year in December, up slightly from a stronger-than-expected 6.1 percent rise in November. The increase in November reflects recovering demand from Europe and Asia, as well as a rebound in shipments to the U.S., which rose for the first time in eight months despite Trump's tariff policy. The recovery in exports is expected to result in Japan posting a trade surplus for a second consecutive month in December.

Import values are expected to rise 4.1 percent in December, marking the fourth consecutive monthly increase, after gaining 1.3 percent in November following rises of 0.7 percent in October and 3.3 percent in September. Imports were seen increasing in communications equipment, pharmaceuticals, and semiconductor-related electronic components, while crude oil, coal, and nonferrous metal ores were expected to decline sharply.

As a result, Japan's trade balance is expected to post a surplus for the second consecutive month, estimated at 331.25 billion yen in December, following a revised ¥316.70 billion surplus in November and a ¥127.72 billion surplus in December 2024.

Australia Labour Force Survey for December (Thu 1130 AET; Thu 0030 GMT; Wed 1930 EST)

Consensus Forecast, Employment - M/M: 27,800

Consensus Range, Employment - M/M: 26,300 to 40,000

Consensus Forecast, Unemployment Rate: 4.4%

Consensus Range, Unemployment Rate: 4.3% to 4.4%

Jobs expected up 27,800 for December after a nasty 21,300 decline in November. The jobless rate is seen up at 4.4 percent from 4.3 percent in November.

US GDP for Third Quarter (Thu 0830 EST; Thu 1330 GMT)

Consensus Forecast, Q/Q - Annual Rate: 4.3%

Consensus Range, Q/Q - Annual Rate: 4.3% to 4.4%

Consensus Forecast, Personal Consumption Expenditure - Annual Rate: 3.5%

Consensus Range, Personal Consumption Expenditure - Annual Rate: 3.5% to 3.6%

No revisions expected from the last report for Q3. Estimates for Q4 suggest similar remarkable growth rates, which deepens the mystery on the disparity between robust growth and flagging employment.

US Jobless Claims for week 1/16 (Thu 0830 EST; Thu 1330 GMT)

Consensus Forecast, Initial Claims - Level: 205K

Consensus Range, Initial Claims - Level: 195K to 206K

Claims are seen rebounding to the 4-week moving average at 205K after a surprising 9K drop to 198K a week ago.

US Personal Income and Outlays for October (Thu 0830 EST; Thu 1330 GMT)

Consensus Forecast, Personal Income - M/M: 0.3%

Consensus Range, Personal Income - M/M: 0.2% to 0.4%

Consensus Forecast, Personal Consumption Expenditures - M/M: 0.3%

Consensus Range, Personal Consumption Expenditures - M/M: 0.1% to 0.5%

Consensus Forecast, PCE Price Index - M/M: 0.2%

Consensus Range, PCE Price Index - M/M: 0.1% to 0.2%

Consensus Forecast, PCE Price Index - Y/Y: 2.8%

Consensus Range, PCE Price Index - Y/Y: 2.7% to 2.8%

Consensus Forecast, Core PCE Price Index - M/M: 0.2%

Consensus Range, Core PCE Price Index - M/M: 0.1% to 0.2%

Consensus Forecast, Core PCE Price Index - Y/Y: 2.8%

Consensus Range, Core PCE Price Index - Y/Y: 2.8% to 2.9%

US Personal Income and Outlays for November (Thu 0830 EST; Thu 1330 GMT)

Consensus Forecast, Personal Income - M/M: 0.5%

Consensus Range, Personal Income - M/M: 0.3% to 0.5%

Consensus Forecast, Personal Consumption Expenditures - M/M: 0.4%

Consensus Range, Personal Consumption Expenditures - M/M: 0.3% to 0.5%

Consensus Forecast, PCE Price Index - M/M: 0.2%

Consensus Range, PCE Price Index - M/M: 0.1% to 0.2%

Consensus Forecast, PCE Price Index - Y/Y: 2.7%

Consensus Range, PCE Price Index - Y/Y: 2.7% to 2.8%

Consensus Forecast, Core PCE Price Index - M/M: 0.2%

Consensus Range, Core PCE Price Index - M/M: 0.1% to 0.2%

Consensus Forecast, Core PCE Price Index - Y/Y: 2.8%

Consensus Range, Core PCE Price Index - Y/Y: 2.7% to 2.8%

The consensus sees income up 0.5 percent for November and spending up 0.4 percent, robust! The PCE price index is seen at 0.2 percent on the month with core also at 0.2 percent.

Friday

Japan CPI for December (Fri 0830 JST; Thu 2330 GMT; Thu 1830 EST)

Consensus Forecast, CPI - Y/Y: 2.1%

Consensus Range, CPI - Y/Y: 2.0% to 2.3%

Consensus Forecast, Ex-Fresh Food - Y/Y: 2.4%

Consensus Range, Ex-Fresh Food - Y/Y: 2.3% to 2.5%

Consensus Forecast, Ex-Fresh Food & Energy - Y/Y: 2.8%

Consensus Range, Ex-Fresh Food & Energy - Y/Y: 2.7% to 3.0%

Japan's nationwide consumer inflation is expected to decelerate sharply in December, reflecting slower food price inflation and a decline in energy prices, as the expiration of subsidies pushed down electricity and gas prices. Still, overall consumer inflation is forecast to remain above the Bank of Japan's 2 percent target.

The core CPI, excluding fresh food, is expected to post its 52nd consecutive month of year-on-year gains, though the pace of increase is seen slowing. It is forecast to rise 2.4 percent in December, the lowest reading since October 2024, down from 3.0 percent in both October and November.

The total CPI is expected to climb 2.1 percent in December, a sharp slowdown from 2.9 percent in November and 3.0 percent in October. Underlying inflation, measured by the core-core CPI that excludes both fresh food and energy, is seen rising 2.8 percent, compared with 3.0 percent in October and November.

Japan Bank of Japan Announcement (Fri 1130 JST; Thu 0130 GMT; Thu 2130 EST)

Consensus Forecast, Change: 0 bp

Consensus Range, Change: 0 bp to 0 bp

Consensus Forecast, Level: 0.75%

Consensus Range, Level: 0.75% to 0.75%

The Bank of Japan's nine-member board is expected to stand pat for now, staying the course of gradual policy normalization, after having decided unanimously to raise the target for the overnight interest rate by 25 basis points (0.25 percentage point) to a 30-year high of 0.75% at its last meeting on Dec. 18-19. The board pointed to easing uncertainties over U.S. trade rows and growing expectations that firms will continue raising wages into fiscal 2026 staring in April.

Singapore CPI for December (Fri 1300 CST; Fri 0500 GMT; Fri 0000 EST)

Consensus Forecast, Y/Y: 1.2%

Consensus Range, Y/Y: 1.1% to 1.2%

CPI expected up 1.2 percent on year in December, same as in November.

UK Retail Sales for December (Fri 0700 GMT; Fri 0200 EST)

Consensus Forecast, M/M: 0.0%

Consensus Range, M/M: -0.2% to 0.2%

Consensus Forecast, Y/Y: 1.1%

Consensus Range, Y/Y: 0.8% to 1.1%

Sales expected flat on the month in December after declining 0.1 percent in November. On year, sales expected up 1.0 percent in December after rising only 0.6 percent in November.

France Business Climate Indicator for January (Fri 0845 CET; Fri 0745 GMT; Fri 0245 EST)

Consensus Forecast, Index: 100.5

Consensus Range, Index: 98.5 to 102.0

Indicator expected to erode to 100.5 in January from 102.0 in December.

Eurozone PMI Composite Flash for January (Fri 1000 CET; Fri 0900 GMT; Fri 0400 EST)

Consensus Forecast, Composite Index: 51.8

Consensus Range, Composite Index: 51.1 to 52.3

Consensus Forecast, Manufacturing Index: 49.3

Consensus Range, Manufacturing Index: 48.4 to 49.7

Consensus Forecast, Services Index: 52.5

Consensus Range, Services Index: 52.1 to 52.9

Business activity seen improving marginally with the composite up to 51.8, manufacturing up to 49.3 and services at 52.5, up from 51.5, 48.8 and 52.4, respectively.

France PMI Composite Flash for January (Fri 0915 CET; Fri 0815 GMT; Fri 0315 EST)

Consensus Forecast, Manufacturing Index: 50.4

Consensus Range, Manufacturing Index: 50.1 to 50.9

Consensus Forecast, Services Index: 50.5

Consensus Range, Services Index: 50.2 to 50.6

A mixed showing expected with manufacturing down a few ticks in January at 50.4 and services up a few at 50.5 from 50.7 and 50.1, respectively.

Germany PMI Composite Flash for January (Fri 0930 CET; Fri 0830 GMT; Fri 0330 EST)

Consensus Forecast, Manufacturing Index: 48.0

Consensus Range, Manufacturing Index: 46.5 to 49.7

Consensus Forecast, Services Index: 52.5

Consensus Range, Services Index: 52.0 to 53.0

Not much change expected with manufacturing seen at 48.0 versus 47.0 and services at 52.5 versus 52.7 a month earlier.

UK PMI Composite Flash for January (Fri 0930 GMT; Fri 0430 EST)

Consensus Forecast, Composite Index: 51.5

Consensus Range, Composite Index: 51.5 to 51.5

Consensus Forecast, Manufacturing Index: 50.7

Consensus Range, Manufacturing Index: 49.5 to 51.7

Consensus Forecast, Services Index: 51.7

Consensus Range, Services Index: 51.5 to 52.4

Composite seen at 51.5 versus 51.4, manufacturing at 50.7 versus 50.6, and services at 51.7 versus 51.4.

Canada Retail Sales for November (Fri 0830 EST; Fri 1330 GMT)

Consensus Forecast, M/M: 1.2%

Consensus Range, M/M: 0.6% to 1.4%

The consensus agrees with the Stats Canada preliminary estimate with an increase of 1.2 percent.

US PMI Composite Flash for January (Fri 0945 EST; Fri 1445 GMT)

Consensus Forecast, Manufacturing Index: 52.0

Consensus Range, Manufacturing Index: 48.1 to 52.5

Consensus Forecast, Services Index: 52.8

Consensus Range, Services Index: 52.3 to 54.0

The PMI manufacturing is expected nearly flat at 52.0 in January versus 51.8 in December and services at 52.8 versus 52.5.

US Consumer Sentiment for January F (Fri 1000 EST; Fri 1500 GMT)

Consensus Forecast, Index: 54.0

Consensus Range, Index: 53.8 to 54.5

No revision expected for the final January from the preliminary at 54.0.