Economic growth has slowed down in both the UK and US, next week's figures could show
On Friday, the BEA is expected to report that US real GDP grew at an annualised rate of just over 1 per cent in Q1, after 2.1 per cent in Q4 2016.
This, however, should not be cause for concern, as other figures in the week will suggest growth will pick up in Q2. The Conference Board is expected to say on Tuesday that consumer confidence is close to a 17-year high, which should herald stronger consumer spending. Figures the same day should show that sales of new homes are up some 12 per cent on a year ago; this too is often associated with higher consumer spending. And Thursday's durable goods orders should show a small rise.
Combined with regional Fed surveys showing high optimism among manufacturers, plus the fact that Q1 GDP has been weak in the past three years only to subsequently recover, all this suggests the slowdown should be only temporary.
We'll also see slower growth in the UK. If the ONS's first estimate of GDP confirms NIESR's estimate, it'll show growth of 0.5 per cent in Q1 after 0.7 per cent in Q4. The slowdown will be mostly due to weaker consumer spending.
Although this slowdown is much milder than the US's, CBI surveys in the week might point to it being longer-lasting.
On Thursday, it could report that retail sales were weak in early April: this would be consistent with the GfK's likely report that consumer confidence is now lower than a year ago, probably thanks to falling real wages.
Monday's survey of manufacturing, though, might be more ambiguous. The good news is that it should report strong export orders - although it won't say that because of globalised supply chains higher exports also imply higher imports. However, the survey might also show that business confidence has moderated (albeit from a high level) due to rising inflation and weaker household spending, and that investment intentions are weak.
Elsewhere, we should see yet more evidence of a global upturn. Although Japanese figures could show that industrial output fell last month, this would follow a big rise in February with the result that output in Q1 was up by a hefty 1.3 per cent on Q4. And in Germany, Ifo's survey should show that growth is at a six-year high. This is not, yet, however, generating inflation in the region. Official figures on Friday should show that the core inflation rate (which excludes food and energy) is stuck below 1 per cent. This will reinforce expectations that eurozone interest rates will stay negative for a long time.