Australia: Job data dominates

  • In the coming week, there is plenty to watch including a speech from the Reserve Bank Governor (Tuesday), the August jobs data (Thursday) and business and consumer sentiment (released on Tuesday and Wednesday).
  • The week kicks-off on Monday with weekly readings on petrol prices (Australian Institute of Petroleum) and the used car market (Datium Insights).
  • On Tuesday the Reserve Bank Governor, Philip Lowe, delivers his annual address to the Anika Foundation event. There will be much interest in whether he maintains his upbeat views on the economy.
  • Also on Tuesday, National Australia Bank (NAB) issues the August business survey. It will be interesting if businesses take a more positive view on the outlook based on the vaccine take up rate. That optimism was identified in the latest IHS-Markit survey of the services sector.
  • And in a busy day on Tuesday, ANZ and Roy Morgan jointly release the weekly consumer confidence survey while the Australian Bureau of Statistics (ABS) separately release the “Overseas Arrivals and Departures” publication and the Residential property indexes.
  • On Wednesday, the Melbourne Institute and Westpac release the September month consumer confidence report. As well as the usual readings on the outlook for household finances and the economy, there is the special survey question on the ‘wisest place’ to put your finances.
  • On Thursday, the ABS issues the monthly employment report. This will be the first report to fully incorporate the impact of lockdowns on the job market. As the ABS point out, hours worked is the best guide to the lockdown impact. Government assistance serves to keep people in jobs but people over a raft of industries cannot work due to closure of non-essential businesses, thus hours of work reduce. And some workers will be defined as ‘not in the labour force’ – that is, not either employed or looking for work.
  • CBA Group economists expect that the data will show around 300,000 lob ‘losses’ with the jobless rate lifting from 4.6 per cent to 5.2 per cent and the participation rate down from 66.0 per cent to 64.9 per cent.
  • Also on Thursday, the ABS publishes the quarterly population data: “National, state and territory population.” A point of interest will be how the birth rate has performed given lockdowns across the nation.
  • On Friday, the ABS will release the “Tourism Satellite Accounts” that will contain “experimental estimates of quarterly tourism employment and jobs to measure the impacts of COVID-19 on tourism activity.”

Overseas: Monthly Chinese economic data

  • In the coming week, there is the monthly ‘data dump’ out of China including retail sales, production and investment. Similarly, retail sales and production data are issued in the US.
  • On Monday in the US, the New York Federal Reserve issues data on consumer inflation expectations and the August budget statement is released.
  • On Tuesday in the US, the Consumer Price Index (CPI) is released with the big debate on whether the recent lift in price growth is a temporary or more longer-lasting phenomenon. This has implications for monetary policy settings. The core CPI (excludes food and energy) may have lifted 0.3 per cent in August.
  • Also on Tuesday in the US, the regular Johnson Redbook weekly data on chain store sales is issued alongside the Small Business Optimism index from the National Federation of Independent Business (NFIB) – currently just off eight-month highs.
  • On Wednesday in the US, the weekly data on US mortgage applications from the Mortgage Bankers Association is scheduled with industrial production figures, data on export and import prices and the Empire State manufacturing index. Production is up 6.6 per cent over the year, down from 9.9 per cent growth in June.
  • On Thursday in China, a raft of data is released for the month of August. The data includes retail sales, production, investment, unemployment and home prices. Important will be the official commentary from the Chinese statisticians. Policymakers are focussed on maintaining a solid growth clip and thus meeting 2021 economic forecasts. Recent purchasing manager surveys point to a Delta-induced slowdown in the economy.
  • On Thursday in the US, the August data on retail sales is issued alongside the influential Philadelphia Federal Reserve index (“Philly Fed index”) and the weekly data on new claims for unemployment benefits (initial jobless claims).
  • US retail sales are still up 15.8 per cent on a year ago but the annual rates are cycling down from highs (53.4 per cent annual growth to April 2021). That said, economists expect sales to fall 0.8 per cent in August as a surge in new Delta virus infections and rising consumer prices crimp spending.
  • Also on Thursday in New Zealand, June quarter economic (GDP) growth data is issued.
  • On Friday in the US, the preliminary September data on consumer sentiment is issued from the University of Michigan. The August index of 70.3 was the weakest result in more than a decade with consumers worried about the outlook for their finances. But a rebound to 72.7 is predicted by economists in September.

Originally published by Craig James, Chief Economist, CommSec