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Investor Signposts 17 Sep 18: RBA & Population data in focus.
CommSec Senior Economist Ryan Felsman previews the economic data scheduled for the week ahead including the RBA Board Minutes, population data and Flash PMI surveys.

Australia: Reserve Bank and population data in focus
• It is a quiet week on the economic data front after a hectic start to Spring. The minutes of the Reserve Bank’s September monetary policy Board meeting is issued Tuesday. Demographic (population) data is released on Thursday together with detailed job market figures including industry employment estimates.
• The week kicks-off on Tuesday when the Roy Morgan-ANZ weekly consumer confidence survey and the Bureau of Statistics’ (ABS) quarterly home prices data are both released.
• The ABS releases its publication “Residential Property Price Indexes” each quarter. The data is relatively “old”, focusing on the three-month period to June 30. Apart from home prices there is other data covering the average value of homes and changes in the number of homes in each state. Annual Australian home price growth is the weakest in six years.
• Also on Tuesday the minutes of the last Reserve Bank Board meeting are released. Each meeting there is a special issue or topic that is discussed. And that discussion can prove useful in gauging member views on interest rate sensitivities. Commentary on the housing market will also be keenly observed.
• On Wednesday, the Department of Jobs and Small Business releases the August skilled internet job vacancies data. Vacancies are up by 4.7 per cent over the year to July, led by Western Australia (up 16.3 per cent) and Tasmania (up 13.6 per cent).
• Also on Wednesday the Reserve Bank’s Assistant Governor (Financial Markets) Christopher Kent speaks about “Money Creation” at the Bank’s Topical Talks Event for Educators in Sydney at 11.30am.
• On Thursday the ABS releases population data and detailed labour market figures. The Reserve Bank releases its quarterly Bulletin. And Commonwwealth Bank releases the Business Sales Indicator – a measure of economy-wide spending.
• Australia’s population is growing at a 1.6 per cent annual rate – one of the fastest growth rates in the developed world. And the ABS labour market data will include the latest estimates of industry job creation.
Overseas: US housing data takes centre stage
• There is no major Chinese economic data scheduled this week. Most attention will be on US housing data releases in the week prior to the all-important US Federal Reserve meeting on September 25-26, where interest rates are expected to lift.
• The week kicks off on Monday in the US with the release of the New York (Empire State) Federal Reserve manufacturing gauge. The index unexpectedly rose to 25.6 points in August from 22.6 points in July. But the report showed that 16 per cent of manufacturers and five per cent of service firms identified rising input prices from tariffs as “substantial”. The index for prices paid rose by 2.5 points to 45.2 points in August.
• On Tuesday the US National Association of Home Builders releases its September survey together with the regular weekly data on chain store sales. The monthly index of builder sentiment fell one point to 67 points in August, the lowest level in eleven months and down from highs of 74 points in December. Mortgage applications to purchase a home have been falling as interest rates have lifted. Buyer traffic dropped two points to 49 points in August, the only component of the index in negative territory (below 50 points).
• On Wednesday in the US, housing starts and building permits are issued for August. Despite rising building costs, property prices and mortgage rates, housing demand is supported by the strong labour market, lower taxes and improved finances. Around 175,000 homes were approved, but not yet started in July, the most since February 2008. And single-family permits in the South were the highest since July 2007. Economists tip starts to lift by 5.2 per cent in September. Building permits are forecast to increase by 0.8 per cent for the month.
• Also on Wednesday the June quarter US current account balance – measuring the flow of goods, services and investments – is released with the weekly data on new mortgage applications. The current account deficit widened to US$124.1 billion in the first quarter of 2018 from US$116.1 billion in the fourth quarter of 2017. As a percentage of GDP, the deficit increased to 2.5 percent from 2.4 percent, amid an increase in goods imports.
• On Thursday US existing home sales, the influential Philadelphia Federal Reserve manufacturing gauge, weekly claims for unemployment insurance and the US Conference Board leading economic index are all issued.
• Existing home sales fell for a fourth straight month in July – the longest stretch of monthly declines since 2013. Supply constraints continue to drag on overall sales and push up home prices. The lower inventory and high prices on available inventory are crimping affordability, especially for first home buyers. The median house price increased 4.5 percent from a year ago to US$269,600 in July.
• The Conference Board’s Leading Economic Index increased by 0.6 per cent in July after increasing 0.5 per cent in June. Another 0.5 per cent lift is forecast by economists in August, signalling a sustained pace of economic expansion in the near term.
• Initial jobless claims for the week ending September 1 decreased by 10,000 to 203,000 – the lowest level of claims since December 6, 1969. The US unemployment rate is near 18-year lows at 3.9 per cent.
• The week rounds out with the Markit “flash” purchasing manager index (PMI) survey estimates issued on Friday for the US, France, Germany, the Eurozone and Japan.
• The Markit US PMI remains expansionary (above 50). In fact, the August data indicated a strong overall improvement in the health of the US manufacturing sector. The upturn was supported by additional rises in output and new orders. That said, production rose at the weakest rate for almost a year. And exports remain the key source of weakness for producers, with foreign orders barely rising in August after two months of modest declines caused, in part, by Chinese tariffs.

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