Last Week’s Highlights
US Housing Data Hit Hard by the Pandemic
The monthly housing starts data, which is a measure of the number of new residential construction projects, fell 22.3% in March. Data from the Commerce Department showed that housing starts fell to an annual rate of 1.216 million during the month.
Building permits, which are an indicator of future housing demand, fell 6.8% during the month to 1.353 million units. The data comes on the back of weak economic reports for the month of March.
The United States was hit hard during the period amid lockdown measures across various states.
US Retail Sales Fall 8.7% in March
Data from the Commerce Department in the United States showed that retail sales fell 8.7% in March. The data reflected the impact of the Coronavirus induced lockdowns.
The decline in March comes on the back of a 0.4% fall in February. Economists forecast a 8.0% decline for March. The data comes as widespread lockdowns and social distancing measures were undertaken since the middle of the month.
Motor vehicle sales and parts fell 25.6% following a 0.5% decline in February. Excluding auto sales, retail sales were down 4.5% in March.
Eurozone Consumer Prices Slow in March
Consumer prices in the eurozone slowed as expected in March. Data from Eurostat showed that headline inflation slowed to a pace of 0.7% in March compared to a 1.2% headline reading in the month before.
The core inflation rate, which excludes food and energy prices, saw a slow down to 1.0% increase.
Energy prices were down 4.5% during the month. But this was offset by a surge in food prices which rose 2.4% during the period. Inflation in the services sector slowed to a pace of 1.3% for the month.
China’s GDP Contracts for the First Time in History
The latest quarterly GDP report from China saw the economic activity in the world’s second-largest economy contracting. Official data showed that China’s GDP fell 6.8% in the three months ending March. This was bigger than the forecasts of a 6.0% decline.
On a quarterly basis, the GDP was down 9.8% and was in line with the expectations. The declines came as China battled the virus outbreak and imposed economic lockdowns to prevent the spread of the virus.
Australia’s Unemployment Rate Rises Marginally in March
The Australian labor market showed only minor signs of distress. The official unemployment rate rose from 5.1% in February to 5.2%. The small increase comes amid forecasts of a rise to 5.4%.
The Australian economy was also seen adding 5,900 jobs during March. But this was slower compared to the 26,700 jobs added in February.
Economists forecast that jobs would fall 30,000 during the month. The participation rate was steady at 66%.
Upcoming Economic Events
Eurozone Flash PMI Numbers to Paint a Dismal Picture
The week ahead will see data from IHS Markit for the eurozone. The preliminary flash estimates covering manufacturing and services are forecast to show a decline.
Both sectors of the economy already fell sharply in March and this trend is likely to continue, according to economists. The eurozone flash services PMI is forecast to fall to 24.9 from 26.4 previously.
Manufacturing PMI is forecast to fall to 39.4 from 44.5 in February.
UK Consumer Prices Set to Ease Further
The monthly inflation report for the United Kingdom is forecast to show a decline in consumer prices. Headline inflation is forecast to ease to 1.5% in March. This comes following a 1.7% inflation print in February.
The core inflation rate which excludes the volatile food and energy prices are forecast to slip modestly from 1.7% in February to 1.6% in March.
New Zealand Quarterly Inflation Forecast to Remain Stable
The quarterly inflation data from New Zealand will kick off the trading week ahead. Forecasts show that inflation will rise at a slightly slower pace of 0.4% in the three months ending March.
This follows an inflation rate of 0.5% in the fourth quarter of last year. However, the data will be brushed aside as investors expect disruption to the data perhaps during the second quarter reports.