The Reuters/U. Mich. consumer sentiment index rose to 63 in Aug. from the midmonth reading of 61.7 and July's 61.2 as gasoline prices fell. It was the best reading since March, but 90% of consumers believe the economy is in a recession. Japanese inflation rises to 2.3%

Japan's consumer prices rose at the fastest clip in almost 11 years in July, led by higher energy and food prices. Core inflation, excluding energy and food, rose a modest 0.2%. Real consumer spending fell 0.5% year over year in July.

Industrial output in Japan rose 0.9% in July, beating expectations of -0.5%. Economists expect Japan to suffer a shallow recession. Canada's economy grows 0.3%

Canada skirted a recession with Q2's slight growth after Q1's 0.8% slide. Economists expected a 0.7% gain. The slow growth raised the chances the Bank of Canada will cut interest rates this week, though most economists predict the central bank will hold rates steady.

Euro zone inflation falls to 3.8%

Price gains cooled in Aug. due to the sharp drop in oil futures after hitting a record 4% in July. But recession fears revived on news of a drop in the European Commission's monthly economic sentiment indicator. It fell to 88.8 from 89.5 in July. Economists expected 89.1.

Switzerland's KOF growth barometer fell to 0.68 in Aug., a 5-year low. The gauge, which predicts the economy's probable performance in 6 months, fell from 0.85 in July, stoking fears of a recession. COMING UP TUESDAY

ISM manufacturing index for Aug., 10 a.m. EDT (forecast: 49.5). Construction spending for July, 10 a.m. EDT (forecast: -0.4%).