3 Numbers To Watch: EU Ind. Prod., US Jobless, US Cons. Comfort

Today’s July report on EU industrial production will drive the economic news for Europe today. Later, US updates on initial jobless claims and the Bloomberg Consumer Comfort Index will draw wide attention as the crowd contemplates the outlook for the macro trend in the remaining months of the year.

Eurozone Industrial Production (09:00 GMT) The market will be keenly focused on today’s report in search of clues for testing the theory that Europe has broken free of recession. The critical question is whether the hard data in the third quarter offers any support for the widely held view that the business cycle has turned for the better in Q2? The evidence so far is primarily based on the revival of growth in Europe’s Q2 GDP report, along with encouraging updates in various sentiment surveys. Today’s industrial production data will provide an early clue for deciding if the positive momentum will roll on beyond Q2.

By that standard, it’s still premature to expect too much too soon. The consensus forecast sees no change for industrial output in July. That’s better than a decline, of course, although zero - assuming the prediction holds - will pale next to June’s 0.7 percent rise. But monthly numbers are volatile, so keep an eye on the year-over-year change for a better read on the trend. The question on this front is: Will the mild annual rise through June - the first positive comparison in recent history - hold up in July?

As usual, some of the individual country profiles for industrial activity are already known. But the data here doesn't look helpful for anticipating today's overall change. According to Eurostat’s database, industrial production in Germany fell a hefty 2.3 percent in July; France’s output slipped 0.6 percent; Spain inched higher by a meek 0.1 percent. (Italy’s industrial production report for July, by the way, arrives today at 08:00 GMT, an hour ahead of the Eurozone release.) In other words, the odds are low for an upside surprise. Whatever today's report tells us, be sure to listen to European Central Bank President Mario Draghi, who's scheduled to speak at 11:40 GMT, for additional insight on the broad macro outlook.

US Jobless Claims (12:30 GMT) Non-farm payrolls in August rose by a less-than-expected 169,000, or near the slowest monthly pace of growth so far this year. Is this a sign that the US labour market and economy are facing new headwinds in autumn? That’s the operative question as we await today’s weekly update on new filings for unemployment benefits.

Recent history looks encouraging, according to the trend in initial jobless claims. These numbers imply that last month’s sluggish payrolls report will be revised higher and/or the updates to come will bring better news. But that’s assuming that today’s claims release doesn’t tell us otherwise. Based on the consensus forecast, the trend still looks favourable. Claims are expected to rise a bit to 330,000 versus the previously reported 323,000. But that’s effectively no change for this volatile series - and that’s a good thing, considering that we’re close to a five-year-plus low in claims. Short of a substantial upside surprise, today’s number will deliver support for thinking that the labour market will continue to expand at a moderate pace.

US Bloomberg Consumer Comfort Index (13:45 GMT) If there’s a reason to worry about the prospects for the US economy, the sagging data for consumer confidence rises to the top of the list - or so this weekly survey of consumer expectations suggests. Indeed, the Consumer Comfort Index (CCI) has fallen sharply in August, pulling back to its lowest level since early April. The connection between the economy and consumer sentiment is always open for debate in the short term, and so it’s still unclear if this weekly read on the mood in America is noise or a genuine reflection of deteriorating expectations. For what it's worth, statistical support for the CCI's negative turn of late is still thin, based on the August data for the monthly consumer indicators via the Reuters/University of Michigan survey and the Conference Board Consumer Confidence Index.

This much is clear: if today’s update from Bloomberg reveals another slump, the news will colour the outlook for tomorrow’s release on the preliminary September estimate of the University of Michigan's Consumer Sentiment Index. Economists anticipate that Friday's report on the mood among consumers will show a fractional retreat versus August. Will today’s data point from Bloomberg convince the market to downgrade that prediction?