Today will be a busy day for economic news, including the monthly update on Germany’s unemployment rate, new jobless numbers for the Eurozone and the first look at the U.S. ISM Manufacturing Index for February.
Despite the latest Unemployment Report released at 8:55 GMT, German consumers don’t seem to be too worried about another European wave of deflations risk. Spending in the union’s biggest economy jumped 0.7percent in January in real terms- well above the crowd’s expectations for a 0.1% gain.
Retail spending on a year-over-year basis, however, showed a slide of 0.8% last month, the first decline in eight months and the Germany Composite Output Index for the services and manufacturing sectors will show a slowdown in February to a seven month low.
And according to Econoday.com’s consensus forecast, today’s monthly unemployment report will show that Germany’s official jobless rate will remain unchanged at 6.2 percent.
Eurozone
The Unemployment Report for the Eurozone is scheduled for 10:00 GMT and despite a return to mild deflation for the year-over-year comparison - down 0.2% in February, the February inflation report for the Eurozone is expected to hold steady at 10.4%, the lowest in over four years.
The consensus seems to be that deflation is not on the horizon. According to a Nordea economist at the BBC, "Deflation would be a disaster for the euro area as the burden of high debt would increase. Therefore, the European Central Bank will continue easing monetary policy significantly.”
USA
In the U.S., the ISM Manufacturing Index will be released at 15:00 GMT. The news out of the U.S. has been mixed. The manufacturing sector continues to deteriorate and last week’s flash report by Markit’s purchasing managers’ index (PMI) revealed that output in February was the weakest in more than three years.
However, the PMI remains above the 50 mark coming in at 51.0 for February. For each of the four months through January the ISM data has remained below 50. Meanwhile, today’s revised PMI for February (due out at 14:45 GMT) is projected to hold on to its thin line of optimism by ticking up to 51.3 against 51.0 in the flash data.
Despite these numbers, the PMI and ISM profiles are expected to point to a weak manufacturing trend that is set to remain so for the foreseeable future.