Craig James – Chief Economist – CommSec

Confidence & the job market
·       The economic data-fest continues. There are around eight economic events of note in Australia in the coming week. In China, the August activity data is released. And in the US there are close to a dozen indicators to analyse.
·       The week kicks off in Australia on Monday when the Reserve Bank releases the latest data on credit and debit card lending. Cards are being used more often. But savvy customers are choosing to pay off credit cards by the due date.
·       Also on Monday the Australian Bureau of Statistics (ABS) releases broader lending finance data, covering business, personal, housing and lease loans.
·       On Tuesday the weekly consumer confidence survey is issued by ANZ and Roy Morgan. Confidence has eased over the past fortnight but from near 3-year highs.
·       Also on Tuesday, the National Australia Bank releases the August business survey. Both confidence and the business conditions index eased in July although the latter is well above the long-term average.
·       And the Reserve Bank also features on Tuesday. The Assistant Governor, Economic, Christopher Kent, delivers the Bloomberg Breakfast Address in Sydney.
·       On Wednesday, there is another speech from a Reserve Bank official. Tony Richards, Head of Payments in the Policy Department delivers a speech on the Gold Coast.
·       And it’s like Groundhog Day on Wednesday as the Reserve Bank speech is accompanied by consumer confidence data. This time it’s the monthly consumer confidence index from Westpac and the Melbourne Institute.
·       On Thursday, the (ABS) releases the August employment data. In recent months unemployment has been ticking very modestly lower. In fact the jobless rate hit a 3-year low of 5.72 per cent in the month. We tip job growth of around 20,000 in the month and a steady jobless rate.
·       Also on Thursday, the ABS releases data on new vehicle sales. Motor vehicle sales are currently at record highs.
·       And the Reserve Bank also makes another contribution on Thursday with the release of the quarterly Bulletin which contains articles of topical interest.
Overseas: Yet more Chinese data to dominate attention
·       There are healthy helpings of ‘top shelf’ economic data in both China and the US in the coming week. And while there are two speeches by US Federal Reserve Presidents on Monday, data releases begin on Tuesday.
·       On Tuesday in China the August activity data is released – covering retail sales, production and investment. Retail sales probably continued to barrel on at a double-digit pace – annual growth of 10.3 per cent is tipped. Production may have been up 6.1 per cent on a year ago with investment up by 8 per cent.
·       In the US on Tuesday, the National Federation of Independent Business (NFIB) releases results of the small business survey. Monthly data on the Federal Budget is also issued together with the regular weekly data on chain store sales.
·       On Wednesday data on import and export prices is released together with regular weekly mortgage finance data.
·       On Thursday, a tsunami of key economic indicators is released. The highlight is probably retail sales data for August. Economists expect that sales (excluding autos) rose by 0.3 per cent in August after a 0.3 per cent fall in July. The data is hardly illustrative of an economy going gangbusters and in need of higher interest rates.
·       Also on Thursday, data on business inflation is released with industrial output, business inventories, import and export prices, the current account and the influential Philadelphia Federal Reserve survey and the New York Fed manufacturing index.
·       Economists expect that production fell by 0.1 per cent in August after a 0.7 per cent gain in July. And producer prices may have lifted by only 0.1 per cent in August.
·       Also on Thursday, the weekly data on claims for unemployment insurance (jobless claims) is issued – a key weekly gauge on the job market.
·       On Friday, the consumer price index (CPI) is issued. In other countries this is the main inflation measure. But in the US the Federal Reserve focuses on the core personal spending deflator (excludes food and energy). The core CPI is up by 2.2 per cent on a year ago, above the 1.6 per cent growth of the key Fed indicator.
·       Still, any surprise strength in the CPI will raise speculation about a September rate hike.
Sharemarket, interest rates, currencies & commodities
·        In the coming week dividend payouts start to lift. In the five days to September 16, $1.25 billion will be paid by companies to shareholders.
·        Over the three-week period from September 19, $16.3 billion will be paid out as dividends by listed companies. The highlight will be the week to September 30 when over $7 billion will be paid.

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