7 Key Economic Data/Events To Watch In Q3

Economic health is sound enough for the market to expect the Fed to continue with its measured pace of rate increases. Therefore, when Federal Reserve chair Janet Yellen sounded dovish at last week's semi-annual monetary policy testimony, it came as a surprise.

The testimony, which cast a cloud of uncertainty on the likelihood of further near-term rate increases, caused those sectors sensitive to interest rates to react. Since each incoming economic event has implications for monetary policy, investors may do well to keep themselves abreast of some market-moving key economic releases and events.

Here is the list of seven economic data, investors should focus on, in the third quarter:

1. Fed Watch

• Event: FOMC Meeting.
• Date: Sept. 19, 20.
• Agency: Federal Reserve.

After raising interest rates by a quarter of a basis point in March and June, each, the Fed is expected to follow up with another rate increase in September, provided data in the intervening period remain healthy. The Fed funds rate are currently at 1–1.25 percent. Although the FOMC meets on July 25–26, ahead of the September meeting, there is very limited chances of a rate move, given that the meeting is not accompanied by the Fed chair's press conference, where she has an opportunity to explain the monetary policy action.

2. Economic Growth Measuring Up?

• Data: Advance Second Quarter GDP.
• Date: July 28.
• Agency: Bureau of Economic Analysis.

The government releases three estimates of quarterly GDP data; the first release, known as the advance data, is the most market moving of the group. The BEA is scheduled to release its advance estimate of second quarter GDP data on July 28, which gives an indication of the overall health of the economy.

3. Zipping Through Auto Sales Numbers

• Data: Monthly Auto Sales.
• Dates: Aug. 1, Sept. 1.
• Agency: Individual Automakers.

Individual automakers are due to release their monthly sales numbers, twice this quarter, having already reported for June in early July. An estimate for industrywide performance is calculated by compiling these numbers.

4. Jobs Read

• Data: Monthly Non-Farm Payroll Report.
• Dates: Aug. 4, Sept. 1.
• Agency: Department of Labor.

The monthly jobs data is deemed important because the Fed operates monetary policy, with the dual objective of attaining maximum employment, while also maintaining stability of prices. Additionally, job growth is important from the perspective of income growth, which triggers spending and in turn fueling economic growth.

5. FOMC Minutes

• Data: FOMC Minutes.
• Date: Aug. 16.
• Agency: Federal Reserve.

Although the July FOMC meeting is widely expected to be a non-event from the perspective of a rate move, the minutes of the meeting due to be released in mid-August could present a detailed look into the deliberations, discussions and thinking among the committee members. This is expected to give a rough idea as to where the Fed is headed to in the near term.

6. Consumer Pulse

• Data: Retail Sales.
• Dates: Aug. 15, Sept. 15.
• Agency: The Commerce Department.

Retail sales give an indication of how consumer spending, which fuels two-thirds of economic activity, would fare in a particular quarter.

7. Inflation Watch

• Data: Consumer Price Index.
• Dates: Aug. 11, Sept. 14.
• Agency: The Labor Department.

Given the Fed's preoccupation with inflation, especially as growth stabilizes, this data is likely to take the center stage.

Related Links:

A Layman's Guide To The Beige Book

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