Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

3 Numbers: U.S. Retail Spending To Ring Up Another Solid Gain

By James PicernoMarket OverviewNov 15, 2016 01:16AM ET
3 Numbers: U.S. Retail Spending To Ring Up Another Solid Gain
By James Picerno   |  Nov 15, 2016 01:16AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
  • Germany’s ZEW economic sentiment indices expected to rise again in November
  • Revised data for Eurozone Q3 GDP growth predicted to match initial estimate
  • Any upbeat GDP forecasts are really just early guesstimates about what’s coming
  • US retail sales likely to increase at a healthy pace for a second month

The second estimate of Eurozone GDP for the third quarter is the main event for Europe today. We’ll also see an update on November’s economic sentiment for Germany, followed by the October report on US retail sales.

Eurozone: Q3 GDP (1000 GMT): The crowd’s projecting that the second estimate for Eurozone GDP growth in the third quarter will hold steady at 0.3%, based on’s consensus estimate.

The slow pace of growth in the single currency area is expected to continue in the fourth quarter via the implied projection in the current release of the Eurozone Composite PMI data for October. “The October PMI signals a mere 0.3% GDP growth rate, suggesting the fourth quarter could see growth unchanged on that seen in the second and third quarters despite the ECB’s further efforts to stimulate the economy,” the chief business economist at IHS Markit said earlier this month.

But sees the potential for a stronger trend unfolding. The consultancy last week estimated Q4 GDP growth at a firmer 0.55% rate. The Bank of Italy’s Euro-Coin Indicator is softer, reporting that euro area output expanded 0.38% in the three months through October. But here, too, there’s a whiff of a mild acceleration in the macro trend in the final three months of this year.

It’s still early in the current quarter and so upbeat forecasts are little more than preliminary guesstimates about what’s coming. But if the trend is picking up, one would expect that today’s Q3 data won’t lose any ground relative to the previous Q3 GDP estimate of 0.3%. If a weaker-than-expected number arrives, however, the news may be an early warning that the prospects for faster Q4 growth are due for a downgrade.

Eurozone: Q3 GDP (1000 GMT)
Eurozone: Q3 GDP (1000 GMT)

Germany: ZEW Economic Sentiment (1000 GMT): Europe’s main economy is expected to pick up speed in the fourth quarter, according to recent sentiment data. Today’s November survey figures from the Centre for European Economic Research (ZEW) will deliver a reality check on the rosy outlook.

Meanwhile, the German PMI Composite Output Index for October suggests that the optimists are right. This benchmark of the macro trend ticked up to a three-month high last month, prompting forecasts for firmer growth in the fourth quarter. “The improvement in the PMI in October lifts hopes that the weaker expansions we have seen in the past two months were just a temporary soft patch, rather than the beginning of a serious slowdown,” an economist at IHS Markit said late last month.

Today’s ZEW report is expected to reaffirm that forecast.’s consensus forecast calls for a modest rise in the current and expectations numbers for November. If the projections are right, the current conditions data is on track to rise to its highest level in more than a year.

Analysts think that the expectations index will inch up too, although remain in a middling range relative to the past year. Nonetheless, if the forecasts are accurate, the widely read ZEW looks set to support the view that Germany’s economic growth will end the year on a relatively strong note.

Germany: ZEW Economic Sentiment (1000 GMT)
Germany: ZEW Economic Sentiment (1000 GMT)

US: Retail Sales (1330 GMT): Consumer sentiment in the US perked up in November, reversing last month’s slight loss, based on this month’s preliminary data of the University of Michigan’s measure of the mood on Main Street. Is this a sign that consumer spending will firm up in the final quarter of 2016?

“The recent gain in sentiment was driven by an improved outlook for the economy,” noted the chief economist for UoM’s survey research.

Meanwhile, economists are looking for another solid advance in retail sales for October.’s consensus forecast sees a spending increase of 0.6% for the second month in a row. The projected gain translates into a 3.5% year-on-year rise, which would be the strongest annual rise in eight months.

If the forecast holds up, the news will add more weight to expectations that the Federal Reserve is poised to raise interest rates next month.

Fed funds futures are already on board with that assumption. The market is pricing in an 86% probability that the central bank will squeeze monetary policy in December, based on CME data for Monday. Another healthy gain in retail spending today will further strengthen the conviction that the policy rate is headed higher in the final month of 2016.

US: Retail Sales (1330 GMT)
US: Retail Sales (1330 GMT)

Disclosure: Originally published at Saxo Bank

3 Numbers: U.S. Retail Spending To Ring Up Another Solid Gain

Related Articles

Tim Ord
VIX Suggests Markets May Retest Monday Lows By Tim Ord - Jan 26, 2022

SPX Monitoring purposes: Covered 1/24/22 open 4356.32=7.57%; Short SPX 1/11/22 at 4713.07. Monitoring purposes GOLD: Long GDX (NYSE:GDX) on 10/9/20 at 40.78. Long Term SPX monitor...

Craig Erlam
Another Promising Rebound By Craig Erlam - Jan 26, 2022 1

We're seeing a strong start to trading on Wednesday after what has been a very turbulent start to the week. We've seen some sharp sell-offs already this week, but investors appear...

3 Numbers: U.S. Retail Spending To Ring Up Another Solid Gain

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email