–Coming Up, Retail Sales, Housing Starts; FOMC, Leading Indicators
WASHINGTON (MaceNews) – Let’s face it, far more significant than the upcoming week’s economic data and FOMC meeting – more than perhaps the entire year’s upcoming data and FOMC meetings – is that the government is beginning to dump American Rescue Plan billions – hundreds of billions – on the nation’s health and education sectors and on those most likely to spend it immediately.
The numbers are staggering. The oncoming $130.4 billion just for upgrading school buildings, along with increased screening and counseling, alone is a monumental program that will enhance construction and community development numbers.
Let’s ponder these numbers for a moment. That single bullet-point on detection and infection tracing is a $51.8 billion effort. New and expanded firms to meet that demand will sprout like spring daffodils.
Add to that the hiring of vaccinators, contact tracers, the funds to build hundreds of mobile clinics,
Yet that’s just the beginning. From 30,000 feet altitude perhaps the most impactful factoid is that an estimated two-fifths of the Plan is directed at the lowest quartiles of income, a new muscular “war on poverty” that will pump massive amounts of high-velocity cash into the American economy.
A mountain as high as $1.9 trillion is an unfathomable amount. It goes a long, long way. The elements of that spending will make you dizzy. Consider: the infusion of $300/week payments per child into every household at least through September; the extension of the jobless benefit enhancement, also now $300/wk plus the huge new tax break for those benefits; the Pandemic Unemployment Assistance for self-employed including gig workers and others not ordinarily eligible, by itself $34.6 billion; the additional 24 weeks for Pandemic Emergency Unemployment Compensation; the state and local government workers who won’t get layoff notices. And, oh yes, there’s those #1,400 direct checks.
Beyond the dollars themselves, think of the possible improvement in business confidence when executives watch truckloads of cash spreading in every direction. Should forecasts for a weaker dollar come true, a side effect of fiscal munificence, manufacturing exports could skyrocket. The Reddit investors, having gotten just a taste of what a little concentrated market pressure can do, could amplify their enthusiasm to a higher level.
Is more massive government spending ahead? An infrastructure program? A renewed push for a private-sector $15 minimum wage that would also help consumer spending? Although Democrats have two more reconciliation process opportunities in the year ahead that allow passage of legislation with only 50 votes in the Senate an important element determining future spending will be the extent of recalibration in store for the legislative influence of congressional Republicans. If deficit hawks can reestablish themselves as a meaningful force on Capitol Hill they could be a constraint on future spending, even in the minority. So far, however, a Republican preoccupation with culture-war issues seems to have distracted them from any focused war on ballooning government debt.
Having said all that, the FOMC meeting Tuesday and Wednesday can’t be ignored. The Wednesday policy statement will be accompanied by an update to the quarterly “dot plot,” providing hints for when on the far horizon the FOMC participants see the possibility of rate hikes and a tapering of asset buys. Mace News Fed correspondent Steve Beckner has previewed the meeting at length elsewhere on this MaceNews.com site.
Tuesday’s retail sales report, after January’s 5.3% surge, may well document a continuing strong acceleration of consumption, the heart of the U.S. economy. The National Retail Federation is anticipating the best year for retail in over two decades with 2021 seeing up to 8.2% annual growth. Given the aforementioned infusion of hundreds of billions in government aid, that could turn out to be an underestimate.
Also coming up in the week ahead is the February industrial production report on Tuesday and February housing starts on Wednesday. All the scheduled data points are listed below.
Upcoming US Economic Data
Monday, March 15– 8:30a ET NYFed Empire State Mfg Survey
Tuesday, March 16 – 8:30a Feb Advance US retail sales; prvs +5.3%
Tuesday, March 16 – 8:30a NYFed March Business Leaders Survey
Tuesday, March 16 – 7:55a Redbook wkly same-store retail sales Y/Y; prvs +8.0%
Tuesday, March 16 – 8:30a Feb Import/Export Prices; prvs imports +1.4%
Tuesday, March 16 – 9:15a Fed’s Feb Industrial Production; prvs mfg +1.0%
Tuesday, March 16 – 10a US Jan business inventories; prvs +0.6%
Tuesday, March 16 – 10a US NAHB March Housing Mkt Index; prvs 84.0
Wenesday, March 17 – 7a US MBA wkly mortgage applications
Wednesday, March 17 – 8:30a US Feb Housing Starts; prvs +6.0%
Wednesday, March 17 – 2p FOMC policy statement; quarterly ‘dot plot’
Wednesday, March 17 – 2:30p Fed Chair Powell post-FOMC news conf
Thursday, March 18 – 8:30a US wkly jobless benefit claims
Thursday, March 18 – 8:30a Philly Fed Mfg Survey; prvs 23.1
Thursday, March 18 – 10a – US Feb Conf Brd leading econ indicators; prvs +0.5%
Separately from Extract Analytics, the outlook for the SPX:
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Contact this reporter: denny@macenews.com.
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