Australia:  Housing data and job vacancies released ahead of Easter holidays

  • In a holiday-shortened week, the Australian economic calendar will be dominated by a suite of ‘Tier 1’ data releases. Purchasing managers’ indexes, home prices, job vacancies, lending indicators, retail and international trade data are all scheduled prior to the Easter holiday weekend.
  • The week kicks off on Tuesday with the weekly ANZ-Roy Morgan consumer sentiment index and fortnightly update on payroll jobs and wages figures from the Bureau of Statistics (ABS). The ABS also issues statistics on regional population for 2019/20.
  • On Wednesday, building approvals data is issued for February. Council approvals to build new homes were up 19 per cent on a year ago in January, but approvals for new private detached houses eased from all-time highs in the month after the Federal Government’s ‘HomeBuilder’ scheme was reduced on December 31.
  • Also on Wednesday, the Reserve Bank issues private sector credit (effectively, outstanding loans) data for February with attention focused on owner-occupier housing credit growth, with the annual rate hitting 2-year highs in January. The ABS also provides an update on infrastructure spending with the December quarter release of engineering construction data. The value of outstanding non-resource projects rose from $45.5 billion in the June quarter to $46.3 billion in the September quarter.
  • On Thursday, the AiGroup and IHS Markit both release manufacturing indexes for March. The CoreLogic home value index is expected to have lifted more than 2 per cent in March to fresh record highs. And the number of measured ABS job vacancies are tipped to reach all-time highs in February. Home lending figures are also scheduled for February with the value of new loan commitments for housing up by 10.5 per cent in January to a record high of $28.8 billion.
  • Also on Thursday, the final retail and international trade estimates for February are due. Preliminary ABS data showed retail spending fell by 1.1 per cent in the month due to ‘mini-lockdowns’ in Victoria and Western Australia. Australia’s trade surplus rose to a record $10.1 billion in January with another surplus expected in February.

Overseas: Focus on US jobs data and Chinese purchasing managers’ surveys

  • Purchasing managers’ indexes in China will be in focus in the coming week as investors gauge the strength of its economic recovery. As always, Friday’s monthly US jobs data is the highlight of the offshore economic calendar.
  • The week kicks-off on Monday in the US with the Dallas Federal Reserve manufacturing index for March.
  • On Tuesday, the weekly Johnson Redbook chain store sales data is issued with home price figures for January from both S&P/Case-Shiller and the Federal Housing Finance Agency (FHFA). Prices have been booming during the pandemic due to cheaper borrowing costs and a desire for larger homes, fuelling a surge in home sales. Rising home prices are supportive of consumer confidence with the Conference Board index expected to have risen from 91.3 to 96 in March.
  • On Wednesday in China, the ‘official’ purchasing managers’ indexes (PMI) from the National Bureau of Statistics are issued. A resurgence in new Covid-19 cases in January and seasonality around the Lunar New Year period dampened activity in February. But factory and services activity have broadly expanded for 12 months.
  • On Wednesday in the US, a hodgepodge of economic releases are due: ADP private sector payrolls; pending home sales; the Chicago purchasing managers’ index and the weekly data on US mortgage applications from the Mortgage Bankers Association (MBA). Economists expect pending home sales to ease 2.5 per cent in February.
  • On Thursday in China, the private sector Caixin manufacturing index is scheduled for release.
  • On Thursday in the US, there is another eclectic array of economic data: construction spending; purchasing managers’ manufacturing indexes from both the ISM and IHS-Markit; Challenger job cuts; Ward’s motor vehicles sales; and the regular weekly data on jobless claims (claims for unemployment benefits).
  • Economists expect that construction spending fell by 0.7 per cent in February after a 1.7 per cent bounce in January. The ISM manufacturing index could ease from 60.8 to 60.5 in March after factory activity hit 3-year highs in February. The ISM gauge of materials costs accelerated the most since 2008 due to supply shortages.
  • And there will be a laser-like focus on Challenger, Gray and Christmas’ March job cuts report after planned redundancies plunged 57 per cent to 34,531 in February – the lowest monthly total since December 2019.
  • To round off a busy week on Friday, the March jobs (non-farm payrolls) report is released. Economists expect around 580,000 jobs to be added or reinstated in the US in March after a better-than-expected 379,000 increase in payrolls in February. The unemployment rate could ease from 6.2 per cent to 6 per cent in the month.
  • But the key measure of spare capacity in the US labour market – the underemployment rate – remained elevated at 11.1 per cent in February, suggesting that the US Federal Reserve will continue to keep the official cash rate near 0.25 per cent, while purchasing US$120 billion of US Treasuries and mortgage-backed securities per month for the foreseeable future.

Published by Ryan Felsman, Senior Economist, CommSec