Australia: Business investment data in focus

  • In the coming week, there are a number of indicators to be released that are inputs to the economic growth equation. The March quarter gross domestic product (GDP) or economic growth data is issued on June 2.
  • But the week kicks off on Monday with the usual weekly readings on petrol prices from the Institute of Petroleum and the report on the used car market from Datium Insights.
  • On Tuesday ANZ and Roy Morgan jointly issue the weekly consumer sentiment survey. The Australian Bureau of Statistics (ABS) releases preliminary April data on international trade in goods (merchandise trade) as well as the weekly payroll jobs and wages report to May 8.
  • The ABS also issues a new publication on Tuesday: “Measuring Non-Discretionary and Discretionary Inflation”. The ABS says it “uses CPI data to present measures of Non-Discretionary and Discretionary inflation.” The distinction is important as spending for non-essential or discretionary goods and services is more sensitive to price changes.
  • On Wednesday, the ABS releases the “Construction Work Done” publication for the March quarter. The data on home building completions that is contained in the report aligns with the dwelling investment measure that is used to calculate GDP in the National Accounts.
  • Also on Wednesday, the ABS issues provisional mortality data to February.
  • On Thursday, the ABS issues the March quarter data on business investment (“Private New Capital Expenditure and Expected Expenditure”). As the title indicates, the latest data on actual spending is issued with expectations on future investment. The business investment data is also used as an input to calculate economic growth for the March quarter.
  • Also on Thursday the ABS issues the “Business Conditions and Sentiments” report as well as the detailed labour force estimates for April. The latter includes estimate of unemployment by region and demographic group.
  • On Friday, the ABS issues the latest detailed 2019/20 estimates of the structure and operation of Australian industries.

Overseas: US economic growth data will grab the most attention

  • Of interest, there are a number of US data releases in the coming week which will shed light on the inflation situation such as the latest data on gross domestic profit (GDP) and personal income & spending.
  • But the week kicks off on Monday in the United States with the release of the National Activity Index from the Chicago Federal Reserve.
  • On Tuesday, the weekly Johnson Redbook chain store sales figures are released with two gauges of home prices, new home sales, consumer confidence and the Richmond Federal Reserve manufacturing index.
  • The S&P/Case-Shiller measure of home prices was 11.9 per cent higher in February than a year ago. And the Federal Housing Finance Agency (FHFA) measure was up 12.2 per cent for the same period. Both measures show US home prices rising faster than in Australia.
  • On Wednesday, the weekly Mortgage Bankers Association (MBA) mortgage applications figures are released.
  • On Thursday in China, industrial profits data for April is scheduled.
  • On Thursday in the US, the usual weekly data on claims for unemployment benefits (initial jobless claims) will get the usual high degree of interest. The data is released alongside durable goods orders, pending home sales and the Kansas City Federal Reserve manufacturing index.
  • Also on Thursday, the second estimate of economic growth in the US (GDP measure) should show the economy growing at a 6.4 per cent annual rate.
  • On Friday in the US, the April data of personal income and spending will be released. But rather than the results for those two measures, more interest is likely to be focussed on the accompanying indicator of prices. This has a long-winded title – the core personal consumption expenditure price deflator. This price measure is generally favoured by the Federal Reserve in preference to the Consumer Price Index. Prices may have lifted 0.6 per cent in April to stand 2.8 per cent higher than a year ago.
  • Also on Friday, data on wholesale inventories is issued with the international goods trade balance and Chicago purchasing managers index.
  • And the ‘final’ May estimate of consumer sentiment from the University of Michigan (also released on Friday) also has a measure of inflation expectations that may garner extra interest.

Originally published by Craig James, Chief Economist, CommSec