WHAT’S ON TAP?

The earnings calendar is very light this week so the focus will be entirely on economic news. The big news of the week will be Friday’s unemployment report. Analysts are expecting a jump of 200K jobs for March. It will be interesting to see whether investors view this as a positive or a sign of potential pressure on the Fed to raise rates. Let’s take a look at what’s on tap.  In conjunction with Econoday:

Monday –

Personal Income and Outlays 8:30 AM ET

Personal income rose only 0.1 percent in January, after a 0.3 percent boost the month before. The softening was due to a return to trend in farm income after a jump in that component in December. The true measure of strength in income for consumers is the wages and salaries component which jumped 0.4 percent in the latest month after edging up 0.1 percent in December. The spending numbers also required some extra digging. A 0.5 percent rise for personal consumption was stronger than expected but, given a 1.8 percent surge in non-durable goods, looks to have been boosted by gasoline. The inflation numbers were mixed in January as the headline number was up 0.2 percent but the core reading was flat. Looking ahead, the wages and salaries component for personal income will likely dip as aggregate weekly earnings fell 0.5 percent in March, according to the employment situation. Current dollar PCEs are a little iffy as core retail sales jumped 0.8 percent but unit new motor vehicle sales dropped 3.7 percent. Look for soft PCE price index numbers since they track CPI. March’s headline CPI was flat while the core was up 0.1 percent.

Personal income Consensus Forecast for March 10: +0.1 percent

Personal consumption expenditures Consensus Forecast for March 10: +0.3 percent

Core PCE price index Consensus Forecast for March 10: +0.1 percent

Tuesday –

ICSC-Goldman Store Sales 7:45 AM ET

Redbook 8:55 AM ET

S&P Case-Shiller HPI 9:00 AM ET

Consumer Confidence 10:00 AM ET

The Conference Board’s consumer confidence index fell back sharply in February, dropping nearly 10 points to 46.0. This was the lowest level since the 40.8 reading for April 2009 but is still above the recession low of 25.3 seen in February 2009. If the confidence index tracks the March consumer sentiment index, look for little change as the final sentiment reading for March matched that for final February.

Consumer confidence Consensus Forecast for March 10: 50.0

State Street Investor Confidence Index 10:00 AM ET

Wednesday –

ADP Employment Report 8:15 AM ET

Chicago PMI 9:45 AM ET

The Chicago PMI for February rose 1.5 points to 62.6—solidly into positive territory. The gain was led by a sharp slowing in deliveries which boosted that sub-index to 62.6 from January’s 55.3. While one might worry that this may have been weather related instead of due to a spike in business activity, other indications suggest otherwise. Production and new orders were up while inventories were down. The very strong reading for new orders coming in at 62.2 for a fifth straight plus-60 reading suggests a healthy headline number for March.

Chicago PMI Consensus Forecast for March 10: 61.0

Factory Orders 10:00 AM ET

Factory orders rose a very solid 1.7 percent in January led by strength in transportation equipment, specifically aircraft. Orders for non-durable goods rose 0.9 percent. Durable goods orders were revised four tenths lower to a still very strong 2.6 percent. More recently, the advance report showed durables orders February gaining 0.5 percent, following a revised 3.9 percent surge in January. With energy prices up for the month, nondurables orders also should rise in February, leading to a boost for overall orders.

Factory orders Consensus Forecast for February 10: +0.4 percent

EIA Petroleum Status Report 10:30 AM ET

Dennis Lockhart Speaks 12:30 PM ET

Thursday -

Motor Vehicle Sales

Sales of domestic-made light motor vehicles in February dipped 2.2 percent to a 7.7 million unit annualized pace, largely on severe snow storms cutting into showroom traffic. Imports, however, fared worse, dropping 7.9 percent to 2.7 million units. The import share was hurt by Toyota’s recall-related stoppage of sales on certain models. Combined domestics and imports were down 3.7 percent to 10.4 million units from 10.8 million in January. Deal making by competitors going after Toyota market share could boost overall sales in March.

Motor vehicle domestic sales Consensus Forecast for March 10: 9.0 million-unit rate

Monster Employment Index 6:00 AM ET

Challenger Job-Cut Report 7:30 AM ET

Jobless Claims 8:30 AM ET

Initial jobless claims for the March 20 week fell to a lower-than-expected 442,000, which outside of a single week in the volatile month of February, was the lowest total of the recovery. The four-week average, at 453,750, is at a cycle low.

Jobless Claims Consensus Forecast for 3/27/10: 440,000

ISM Mfg Index 10:00 AM ET

The composite index from the ISM manufacturing eased back in February to 56.5 from 58.4 the month before. But the number was still at a healthy level above break even, indicating moderate growth in manufacturing activity. The composite index has been above 50 for seven months in a row. Looking ahead, the March composite is likely to remain well into positive territory as the new orders index slipped but remained at a high reading of 59.5.

ISM manufacturing composite index Consensus Forecast for March 10: 56.3

Construction Spending 10:00 AM ET

Construction spending in January dropped 0.6 percent after sinking 1.2 percent in December. On the year, total construction has declined by 9.3 percent. Weakness in the month was led by a fall in private nonresidential spending with public outlays also slipping. The bright spot was private residential construction spending which posted a notable gain. Looking ahead, overall outlays are likely to fall back further as housing starts dropped a sharp 5.9 percent. This likely was weather related due to severe snow storms. This effect will likely been seen in other components of construction spending.

Construction spending Consensus Forecast for February 10: -1.1 percent

EIA Natural Gas Report 10:30 AM ET

Friday -

Employment Situation 8:30 AM ET

Nonfarm payroll employment in February declined 36,000, following a 26,000 decrease in January. Weakness in February was led by a 64,000 drop in construction jobs. Manufacturing and mining both actually edged up. Service-providing jobs were up 42,000 in February with the highlight being a 48,000 jump in temp help. Despite these positive signs, the big negative is coming from the public sector as government jobs fell 18,000 despite the hiring of 15,000 temporary Census workers. Wage inflation in February eased to an anemic 0.1 percent rise from 0.2 percent the month before. From the household survey, the unemployment rate held steady at 9.7 percent in February. Looking ahead, an easing in the drop in construction plus a stronger gain in Census workers could put payroll jobs back in the positive column for March.

Nonfarm payrolls Consensus Forecast for March 10: +200,000

Unemployment rate Consensus Forecast for March 10: 9.7 percent

Average workweek Consensus Forecast for March 10: 33.9 hours

Average hourly earnings Consensus Forecast for March 10: +0.2 percent