Kay Van-Petersen
PMI data, Q4 growth and GDP figures are on tap in week 43, but central-bank meetings could be the key events, says Kay Van-Petersen, macro strategist at Saxo Capital Markets.
Article / 29 September 2016 at 5:01 GMT

3 Numbers: Sluggish, but Q2 US GDP to tick higher

editor/analyst /
United States
  • German jobless data to be closely read after economic sentiment numbers
  • The third estimate for US GDP growth in Q2 is to post sluggish increase
  • The US pending home sales index is projected to rise in August

By James Picerno

A busy day of economic releases awaits for Thursday, including the monthly unemployment report for Germany. Later, several US numbers are scheduled, starting with the revised Q2 GDP figures, followed by the pending home sales update for August.

Germany: Unemployment Report (0755 GMT): Recent sentiment data for Europe’s biggest economy was mixed, but today’s monthly update on unemployment will probably skew positive and reassure skeptics that moderate if slightly slower growth is still a reasonable forecast for Germany.

The outlook is certainly relatively encouraging via the Ifo Business Climate Index, which posted a strong rise in September after slumping in the previous month. Yesterday’s report on the mood in the consumer sector via Gfk, by contrast, ticked lower.

“It would seem that German citizens believe that their country's economy is set to develop more weakly over the next few months,” Gfk advised. “This is signaled by the third successive drop in economic expectations” for the consultancy’s Consumer Climate Index.

The macro trend also turned softer in September via last week’s flash estimate of the Germany Composite Output Index, which eased to its lowest-but-still-positive reading in nearly a year-and-a-half.

Germans believe their economy will grow more weakly over the next few months. Photo: iStock

“The upturn in Germany’s private sector economy is losing further momentum,” said an IHS Markit economist last week.

If the macro trend is weakening, the gathering clouds may show up in today’s hard data on the jobless population. Recent history, however, shows no sign of trouble. The number of newly unemployed workers has declined in every month since last October.

Germany’s economic growth is still at risk of decelerating. But short of a dramatic spike in the ranks of the unemployed in today’s report, it’s sensible to assume that any slowdown, although unwelcome, will be mild.

US: Q2 GDP (1230 GMT) Economic growth in the US has been weak this year, but relief is coming, according to economic forecasts.

As an appetiser, today’s third revision for Q3 GDP is expected to inch higher to a 1.3% increase from the 1.1% advance in the current estimate, according to’s consensus forecast. That’s still a sluggish pace, but looking ahead to Q3 is widely expected to bring even better news.

The Atlanta Federal Reserve’s Q3 nowcast sees GDP growth accelerating to 2.8% (as of September 28) when the government publishes its “advance” estimate next month. The New York Fed’s September 23 estimate is a bit softer, although the projected 2.3% rise for Q3 is still a solid improvement over Q2.

But with a month of data updates yet to come, there’s still plenty of uncertainty between now and October 28, when the Bureau of Economic Analysis publishes the Q3 numbers.

For now, however, the crowd is convinced that growth will accelerate… starting with today’s revised Q2 release.

US: Pending Home Sales (1400 GMT) Real estate sales data published in recent days fell short of expectations, which raises new questions about the outlook for the housing market. Optimists, however, are look for a reprieve in today’s August report for pending sales.

Existing home sales fell more than expected in last week’s update, sliding to 5.33 million units (annualised rate) in August - a six-month low.

Monday’s update on new home sales suffered, too, with transactions dropping nearly 8% last month, although revisions bumped up the numbers against the previous round of estimates.

Note, however, that both measures enjoyed positive annual comparisons through August, especially for new home sales, which surged nearly 21% last month against the year-earlier level. The upside skew suggests that the latest monthly setbacks may be noise.

“The data are highly volatile, and, through the volatility, the trend still looks upward,” the chief US economist at High Frequency Economics wrote in a note to clients this week.

Optimism is expected to receive a boost in today’s figures for pending home sales, which are considered a leading indicator for existing transactions.’s looking for 0.5% increase in the pending data, which implies that existing sales will rebound in the next report. If the estimate holds, the case will strengthen for arguing that the broad trend for real estate demand is still positive.


-- Edited by Adam Courtenay

James Picerno is a macro analyst/editor at Follow James or post your comment below to engage with Saxo Bank's social trading platform.


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