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Australia: Jobs and retail spending in focus

  • The all-important labour force survey and preliminary update on retail trade dominate economic releases in the coming week. Minutes of the last Reserve Bank (RBA) Board meeting are issued and Governor Philip Lowe speaks.
  • The week kicks off on Monday when RBA Governor Lowe gives a speech to the Melbourne Business Analytics Conference in Melbourne at 10.15am AEDT.
  • On Tuesday, Commonwealth Bank (CBA) Group economists release the Household Spending Intentions (HSI) survey using Google Trends data for February. Other weekly data releases include, the ANZ-Roy Morgan consumer sentiment index and the ABS payroll jobs and wages data for the second half of February.
  • Also on Tuesday, the ABS publishes home prices data for the December quarter: Residential Property Price Indexes. And overseas arrivals and departures data for January are scheduled.
  • The RBA’s March 2 Board meeting minutes are also issued on Tuesday. Policymaker’s signalled that they are not expecting to hike the cash rate until 2024 “at the earliest”. And in response to rising bond yields said, “The Bank is prepared to make further adjustments to its purchases in response to market conditions.” 
  • On Wednesday, the preliminary overseas arrivals and departures data for February is released with the ABS’ Covid-19 household survey. Commentary on household use of stimulus payments as JobKeeper is ‘tapered’ will be of most interest to economists.
  • Also on Wednesday, Christopher Kent, Assistant Governor (Financial Markets) gives an online speech at the Australian Finance Industry Association at 10.30am AEDT.
  • On Thursday, Commonwealth Bank (CBA) Group economists estimate that Australia added around 30,000 jobs in February with the unemployment rate easing from 6.4 per cent to 6.2 per cent.
  • Also on Thursday, population data is issued for the September quarter. Population growth is expected by policymakers to fall to the slowest annual growth rate since World War I at just 0.2 per cent in 2021. And the Reserve Bank’s thematic-inspired Bulletin is also issued.
  • On Friday, preliminary retail spending figures for February are due with CBA Group economists estimating a modest 0.2 per cent lift in sales.

Overseas: Chinese monthly activity data and US Federal Reserve meeting the highlights

  • In the coming week, Chinese monthly activity and US retail sales data dominate the data docket. But all eyes will be on the US Federal Reserve Open Market Committee (FOMC) policy meeting on March 16-17.
  • The week kicks-off on Monday in China with the release of retail sales, industrial production and fixed asset investment data for January-February. Economists expect double-digit gains due to pandemic shock (base effects) in early 2020 with retail spending forecast to surge 32.0 per cent and production up 31.6 per cent on a year ago. And investment is tipped to soar 41.0 per cent in the first two months of 2021 when compared with the year before. New home prices data for February is also scheduled.
  • On Monday in the US, the influential New York Empire State manufacturing index for March is due.
  • On Tuesday, a flurry of economic indicators are scheduled, including weekly chain store sales, retail sales, import/export prices, industrial production, business inventories and the NAHB housing market index.
  • The retail spending data will be of most interest as the US recovery gains traction. Spending could ease by 0.2 per cent in February after a 5.3 per cent surge in January – the biggest lift in 7 months. Household consumption is expected to be supported by the jobs recovery and the receipt of stimulus cheques in the coming months.
  • On Wednesday, the two-day US FOMC policy meeting concludes followed by a press conference by Chair Jerome Powell. A key focus of the meeting will be on the Fed response to recent bond market dysfunction, tensions between demand-pull and cost-push inflationary pressures and still-elevated slack in the US labour market. No change in official interest rates is expected with most attention focused on the Fed’s US$120 billion per month asset purchase program as borrowing costs for mortgage holders increase.
  • Also on Wednesday, the cold winter blast (which stopped construction activity) and rising borrowing costs are expected to weigh on the February housing starts and building permits data. Residential starts are expected to fall by 1.6 per cent in the month to an annualised rate of 1.56 million units. Starts hit 14-year highs back in December 2020. And council building consents could plunge 8.5 per cent in the month to an annualised rate of 1.725 million units in the month.
  • On Thursday, the regular weekly data on jobless claims (claims for unemployment benefits) are issued with the Philadelphia Federal Reserve manufacturing index for March and Conference Board leading index for February. The ‘Philly’ Fed factory index could ease from 23.1 to 20 points with the leading index up 0.3 per cent in the month.

Originally published by Ryan Felsman, Senior Economist, CommSec