On Thursday the ABS releases three publications of note. The first is job vacancies, a key gauge on the health of the job market. The second publication contains the latest population estimates.
All the indications suggest that migration has been rising and this should be confirmed in the March quarter data. Stronger population growth serves to boost overall economic growth. And that boost is especially noticeable if the growth is driven by more people coming to our shores.
And the third piece of data is the financial accounts. Not only do these figures assist in gauging the financial wealth levels of Australians, the data also shows which financial assets we are choosing to hold as well as the financial ownership level of foreigners.
And on Friday, the Reserve Bank releases the latest financial aggregates – including private sector credit (effectively, loans outstanding) and money supply measures. Credit is expanding modestly at present at an annual rate around 4.5%, but businesses are becoming keener to lift debt levels.
In the US, the week kicks off on Monday with two regional economic surveys. The Chicago Fed index for August is slated for releases while the Dallas Fed manufacturing index for September is released the same day.
On Tuesday, there is another tranche of regional surveys, this time from the Richmond and Dallas Federal Reserve districts. On the same day there are also two gauges of home prices. The Standard and Poor’s/Case Shiller home price series is released and analysts are hopeful that prices lifted 0.8% in July after a 0.9% increase in June. And the Federal Housing Finance Agency also issues its July home price measure the same day.
Also on Tuesday the consumer confidence survey for September is issued. The more regularly reported sentiment index from the University of Michigan has already noted a lift in confidence levels and this should be reflected in the Conference Board measures.
On Wednesday, new home sales data is issued alongside the weekly reading on new applications for home loans and mortgage refinancing. Economists believe that the housing recovery continued in August with new home sales lifting by around 2%.
On Thursday, a bevy of data is scheduled. The final estimate for economic growth (GDP) in the June quarter is issued with a 1.7% annual pace likely to be confirmed. A measure of business investment – durable goods orders – is also released on Thursday. This measure is both “lumpy” and volatile and accordingly economists do expect a 2.5% fall in orders after the solid 4.1% gain in July.
Also released on Thursday is data on pending home sales, weekly claims for unemployment insurance and regional surveys covering Chicago and Kansas City.
And on Friday, data on personal income and spending is issued together with consumer sentiment. Economists believe that consumers are spending with consumption up 0.5% in August, outpacing a 0.2% increase in income.
When do you prefer to buy goods? Most would say, “When prices are low”. And Chinese resource buyers are no different. In recent years, Chinese buyers have bought up iron ore and coal when it was cheap, built up stockpiles and then ran these down over time. There are indications that the same trend has been in operation over 2012.
Spot iron ore peaked at $US149.40 a tonne in mid-April and then retreated to $US86.70 in early September. But in just the past fortnight, prices have rebounded 26.1% to $US109.60 a tonne.
Will the high Aussie dollar cause the Reserve Bank to cut rates next month? We are doubtful, unless the currency was to rebound above US106 cents. The Reserve Bank has never been one to panic, and it would need to see a “significant” deterioration in the global economy before electing to cut rates again.
Craig James is the chief economist at CommSec.
