29thFebruary 2024
Thursday
Thursday isanticipated to be a pivotal day for economic news, highlighted by a series ofimportant announcements. Germany is scheduled to release its preliminarymonth-to-month Consumer Price Index (CPI), Canada will publish its monthlyGross Domestic Product (GDP) data, and the United States is expected to presentits monthly Core Personal Consumption Expenditures (PCE) Price Index inconjunction with the most recent Unemployment Claims figures.
EUR - German Prelim CPI m/m
The ConsumerPrice Index (CPI) measures monthly changes in the cost of goods and servicespurchased by consumers, with both Preliminary and Final releases approximately15 days apart. This Eurozone indicator incorporates data from 6 German statesthroughout the day and holds significance for currency valuation, as itinfluences central banks' interest rate decisions due to its impact oninflation.
In January 2024,the German Consumer Price Index experienced a modest increase of 0.2% from thepreceding month, continuing the upward trajectory from December's 0.1% rise.This increment was partially propelled by a significant 2.2% surge in the costof restaurant services, a consequence of the cessation of a temporary ValueAdded Tax (VAT) reduction on food items. The food sector, more broadly,witnessed a 0.8% escalation in prices, with fresh vegetables notablyexperiencing a substantial 5.8% increase. Additionally, the energy sectorreported a slight 1.2% augmentation, driven by a 2.3% increase in natural gas pricesand a 1.0% rise in fuel costs. In contrast, the prices for package holidays,clothing, and footwear recorded significant declines of 15.8%, 5.9%, and 3.5%respectively, attributed to seasonal adjustments.
TL;DR
Category
Change
Details
1 Overall CPI
+0.2%
From the preceding month
2 Restaurant Services
+2.2%
Due to end of VAT reduction on food
3 Food Sector
+0.8%
Notably, fresh vegetables up by 5.8%
4 Energy Sector
+1.2%
Natural gas up by 2.3%, fuel costs up by 1.0%
5 Package Holidays
-15.8%
Seasonal adjustments
6 Clothing
-5.9%
Seasonal adjustments
7 Footwear
-3.5%
Seasonal adjustments
The forecast forthe German Preliminary CPI m/m anticipates a rise to 0.5%, upfrom the previous figure of 0.2%.
The upcoming GermanPrelim CPI m/m for Germany is set to be published on Thursday at 1:00 PMGMT.
CAD - GDP m/m
The GrossDomestic Product (GDP) measures the monthly change in the economy's overalloutput, adjusted for inflation, and is released approximately 60 days after theend of the month. It serves as the most comprehensive indicator of economicactivity and is the primary gauge of the economy's well-being.
Canada's economywas expected to have grown by 0.3% in December 2023, with increases in themanufacturing, real estate & rental & leasing, and mining, quarrying& oil & gas extraction sectors being partially offset by declines intransportation & warehousing, construction, and educational services. InNovember, the GDP had risen by 0.2%, more than the preliminary estimate of a0.1% advance and following three months of no change, as services-producingindustries had edged up by 0.1% despite the impact of strikes in the Quebecpublic sector, and goods-producing services had gone up by 0.6%. Themanufacturing sector had increased by 0.9%, driven by both non-durable goods(1.2%) and durable goods (0.6%). Expansions were also seen in transportationand warehousing (0.8%), wholesale trade (0.7%), information & culturalservices (0.5%), and mining, quarrying, and oil and gas extraction (0.3%).Conversely, educational services (-0.3%), construction (-0.2%), and finance& insurance (-0.2%) had contracted.
TL;DR
Month
Overall GDP Growth
Sector
Change
Notes
1 December 2023
+0.3%
Manufacturing
Increase
2 Real Estate & Rental & Leasing
Increase
3 Mining, Quarrying & Oil & Gas Extraction
Increase
4 Transportation & Warehousing
Decrease
5 Construction
Decrease
6 Educational Services
Decrease
7 November 2023
+0.2%
Services-Producing Industries
+0.1%
Despite Quebec public sector strikes
8 Goods-Producing Services
+0.6%
9 Manufacturing
+0.9%
Driven by non-durable (1.2%) and durable goods (0.6%)
10 Transportation & Warehousing
+0.8%
11 Wholesale Trade
+0.7%
12 Information & Cultural Services
+0.5%
13 Mining, Quarrying & Oil & Gas Extraction
+0.3%
14 Educational Services
-0.3%
15 Construction
-0.2%
16 Finance & Insurance
-0.2%
The CanadianGDP m/m growth rate is projected to remain constant at 0.2%,aligning with the prior month's performance.
The upcoming CanadianGDP m/m figures are scheduled for release on Thursday at 1:30 PM GMT.
USD - Core PCE Price Index m/m
The CoreConsumer Price Index (Core CPI) tracks monthly changes in the cost of goods andservices purchased by individuals, excluding food and energy, with a releaseapproximately 30 days after the month's end. Unlike the broader CPI, Core CPIfocuses solely on items consumed by individuals and weighs prices based ontheir total expenditure per item, providing valuable insights into consumerspending patterns. It serves as the Federal Reserve's primary gauge ofinflation and is significant for currency valuation, as central banks oftenraise interest rates in response to increasing prices to fulfil their inflationcontrol mandate. Despite its importance, Core CPI tends to receive lessattention compared to the standard CPI, which is released about 10 daysearlier.
In December2023, Core PCE prices in the US, excluding food and energy, experienced a 0.2%month-over-month increase, aligning with market projections and marking aslight acceleration from November's 0.1% rise. Annually, core PCE pricesadvanced by 2.9%, falling just short of the anticipated 3% and recording thelowest level since February 2021, thereby continuing the disinflationary trendobserved by the Federal Reserve's preferred metric. This trend was in line withearlier indications of potential rate reductions within the year. In terms ofthe broader national PCE, which encompasses energy and food, there was a 0.2%monthly and 2.6% annual increase, meeting expectations. Goods prices saw amarginal uptick of less than 0.1% year-over-year, while service prices remainedsignificantly higher at 3.9%.
TL;DR
Price Index
Monthly Change
Annual Change
Notes
1 Core PCE (Excluding Food & Energy)
+0.2%
+2.9%
Lowest annual increase since February 2021, indicating a disinflationary trend
2 Broader National PCE (Including Food & Energy)
+0.2%
+2.6%
Aligns with market expectations
3 Goods Prices
<0.1%
-
Marginal yearly increase
4 Service Prices
-
+3.9%
Significantly higher compared to goods
The Core PCEPrice Index is projected to rise, reaching 0.4% up from the earlierrate of 0.2%.
The forthcoming CorePCE Price Index month-over-month figures are due for publication on Thursdayat 1:30 PM GMT.
USD - Unemployment Claims
The InitialJobless Claims, released weekly on the first Thursday after the week ends,signify the earliest economic data for the nation. Market impact varies butgarners more attention during significant developments or extreme readings.Despite being considered a lagging indicator, the number of new unemploymentinsurance filings is vital for assessing overall economic well-being, as itstrongly relates to consumer spending and influences monetary policy decisions.It is also known as Jobless Claims.
The number ofindividuals filing for unemployment benefits in the US decreased by 12,000 to201,000 in the week ending February 17th, significantly below the anticipated218,000, marking the lowest level of claims since the 189,000 recorded fiveweeks prior, a 16-month low. Furthermore, the number of continuing claimsdropped by 27,000 to 1,862,000 in the preceding period, surpassing the expected1,885,000, indicating an improved ease in job finding for the unemployed. Thisdata complemented the robust jobs report from January, highlighting thehistorical tightness of the US labor market and providing the Federal Reservewith more flexibility to maintain higher interest rates should inflationpersist. The four-week moving average decreased by 3,500 to 215,250, while thenon-seasonally adjusted claim count experienced a reduction of 26,053 to197,932, with notable declines observed in California (-8,584), Kentucky(-3,655), and Michigan (-1,907).
TL;DR
Metric
Value
Change from Previous Period
Notes
1 Initial Unemployment Claims
201,000
-12,000
Lowest since 189,000 recorded five weeks prior
2 Continuing Claims
1,862,000
-27,000
Indicates easier job finding
3 Four-Week Moving Average
215,250
-3,500
Reflects a smoother trend
4 Non-Seasonally Adjusted Claims
197,932
-26,053
Notable state declines in CA, KY, and MI
Predictions forthe USUnemployment Claims show a rise to 210,000 from theprevious figure of 201,000.
The upcoming theUSUnemployment Claims report is set to be published on Thursdayat 1:30 PM GMT.
