The final countdown
The cupboard is largely bare in terms of key domestic economic indicators or events until January 3. Still, the Federal Government will release its Mid-year estimates of the Budget position on Monday. On Tuesday the Reserve Bank Board minutes are released, while private sector credit figures are released on New Year’s Eve.
The Reserve Bank minutes is unlikely to surprise. Policymakers are pretty much talked out when it comes to 2016. The Reserve Bank remains optimistic about the medium term prospects for the economy, and no doubt the lift in commodity prices would give them further confidence.
In terms of private sector credit, lending probably advanced by 0.5 per cent in November, lifting the annual growth rate from 5.3 per cent to 5.4 per cent. While housing remains the core driver of lending the lift in business borrowings is encouraging.
In contrast to Australia, there are still plenty of indicators to watch in the US, focussing on consumer spending, consumer confidence and the housing market. But also the influential regional manufacturing surveys are released over the next couple of weeks and will feed into the ISM manufacturing gauge released in the New Year.
Overall, US economists are forecasting modest improvements in indicators to be released over the coming fortnight. The final reading on September quarter economic growth should confirm that the US recovery is on track, supporting the decision by the Federal Reserve to lift interest rates for only the second time in almost a decade. Similarly house price growth remains healthy, while activity and new construction in the sector remains strong. It’s clear the the US economy is in good shape with firm economic growth and low unemployment. No doubt the focus in the New Year will be on the discussion around further US interest rate hikes.