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Our comments and estimates on major economic data due for release in the USA over the next week:

Empire manufacturing index
(Monday 14th), Philadelphia Fed (Thursday 17th) – Both the Empire manufacturing index and the Philadelphia remained in January at levels in line with a continuance of the industrial sector upward trend in early 2011: the first rose from 9.89 to 11.92 and the latest edged down from 20.8 to 19.3. Our expectations is for both the indices to increase in February as better than expected economic growth is reported around the world. An improvement in U.S. consumer spending and the recent strong increase in corporate earnings are likely to boost business morale: our estimate is for the Empire Manufacturing index to increase to 13.4 and for the Philadelphia Fed to 20.5.
Retail sales (Tuesday 15th) – Retail sales data rose at a healthy pace over the last 5 months, reducing concerns on the short term outlook on consumer spending. In January retail sales are expected to confirm the recent positive trend, in line with anecdotal evidence coming from major retailers. Retail sales should increase by 0.6% m/m both in the headline and in the ex-auto figures, while the ex-auto and ex-gasoline figure should increase by a more moderate 0.4% m/m. The data should be in line with our expectations that consumer spending will continue growing in the next few months.
NAHB housing market index (Tuesday 15th) – In January the NAHB housing market index remained unchanged at 16 for the third consecutive month. With housing market data showing an improvement in the last few months, especially as regards home sales, albeit remaining at historically low levels, we expect the builder confidence index to slightly improve in February, rising to 17. However, the index would remain well below the long-term average (49.8), confirming that the housing sector is likely to remain weak for the next few months.
Housing starts (Wednesday 16th) – Housing starts fell to 529k in December following the rebound in November from 533k to 553k. Even if the outlook for the housing sector is slightly improving, we do not envisage housing starts to rebound strongly in the short term amid bad weather conditions: our estimate is for housing starts to remain almost unchanged at 535k.
Industrial production (Wednesday 16th) – Industrial production rose by 0.9% m/m in December, led by a 4.3% m/m surge in utilities production while production in the manufacturing sector edged up by 0.4% m/m. With the index of aggregate weekly hours decreased by 0.2% m/m in January, we expect industrial production to have risen by a modest 0.2% m/m in the same period. However, industrial production is likely to strengthen in the next few months in line with the strong upward trend in the business confidence indices. Capacity utilization is likely to remain almost unchanged in January, rising from 76% to 76.1%, a level in line with no inflationary pressures in the short term.
Consumer price index (Thursday 17th) – The consumer price index rose by 0.5% m/m in December as oil prices stabilized above USD90 per barrel. With oil prices still at high levels we expect the CPI to increase by 0.5% m/m again in January, with the year-over-year change climbing from 1.4% y/y to 1.7% y/y. However, the core CPI is likely to rise by 0.1% m/m for the third straight month (0.9% y/y), indicating that inflationary pressures are subdued for now.
Leading indicator (Thursday 17th) – The leading indicator rose strongly in the last two months of 2011 – 1% m/m in November and 1.1% m/m in December – signalling that the US economy is likely to expand at a healthy pace in the next few months. We expect the leading indicator to extend the positive trend in January, albeit at a slower pace: +0.1% m/m. The most positive contributions are likely to come from the yield curve and from the equity market, while the most negative one from the initial jobless claims and average workweek. The data should not change the view that the U.S. economy will growth at a healthy pace in the next few months.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: U.S. Next Week: Focus on the Industrial Sector and CPI