The week ahead: 12 - 16 August 2024
These are the Key Macro Events for the upcoming week.
United States – We expect July Core and Headline CPI inflation to come in at 0.2% m/m, with both y/y figures staying steady, at 3.3% and 3.0% respectively. We expect headline retail sales to pick up after last month's weak spending (0.4% m/m), driven by a pick-up in auto sales. The other categories may therefore come in a bit weaker. Industrial production is likely to stay flat (-0.0% m/m) after last month's surprise to the upside.
Eurozone – We expect June industrial production in the eurozone to come in at -2.4% yoy. The manufacturing PMIs for June and July already indicated that weakness in the manufacturing sector is persisting longer than earlier anticipated. The release of industrial production data is expected to confirm that.
The Netherlands – Q2 GDP published on Wednesday is expected to marginally increase by 0.2% qoq after the downwardly revised decline of -0.5% in Q1. The positive figure will be driven by internal demand; with increasing household consumption as real incomes are supported by declining inflation and elevated wage growth, and also government spending. Net exports will contribute negatively, given the in the German economy and the industrial sector recovery . With meagre exports, still high interest rates and the weakened macroeconomic environment, investments will decline. All in all, this reflects our view on the Dutch economy for 2024, where growth will gradually pick-up but will remain below the trend rate in the coming quarters.
The unemployment rate is expected to edge up to 3.7% in the July figure (3.6% in June), with the number of firms reporting labour shortages as the most important obstacle to production having peaked and the number of bankruptcies normalizing further from pandemic lows. Still, from an historical perspective the labour market remains tight.