The Week Ahead

Australia: Spring into ‘economic reporting season’

The focus shifts from the corporate ‘profit reporting season’ to the ‘economic reporting season’. Construction data on Wednesday and business investment figures on Thursday are key inputs to gross domestic product – the main measure of economic growth. The June quarter economic growth data is released on September 7.

The coming week kicks-off on Monday, when the Australian Bureau of Statistics (ABS) releases preliminary retail trade data for July. The Reserve Bank Governor has indicated that he will watch the household sector closely when deciding on interest rate settings.

On Tuesday, the ABS issues data on building approvals and ANZ and Roy Morgan jointly issue the weekly consumer confidence survey. The building approval figures are volatile but offer insight on future construction activity.

On Wednesday, the ABS issues the Construction Work Done publication and the Reserve Bank releases Financial Aggregates. The former publication includes inputs into the calculation of economic growth, namely residential and commercial building. The latter report includes private sector credit (basically ‘outstanding loans’) as well as money supply measures.

Thursday is shaping as a big day. Firstly, CoreLogic releases the home value report – the August data on home prices. Rival, Proptrack, also issue data on home prices.

Secondly, the ABS issues Private New Capital Expenditure and Expected Expenditure. The title may be long, but the data is important, covering actual and projected business investment spending. Survey data from Commonwealth Bank indicates that businesses have been actively spending on new equipment.

Thirdly, the ABS issues the Lending Indicators publication. The data centres on home lending but includes other lending data as well such as personal, business and lease loans. The July report may give some guide as to the impact of recent rate hikes.

And also on Thursday, S&P Global releases the final reading on its August purchasing managers’ index (PMI) for the manufacturing sector. Factory activity expanded but hit a 12-month low in the preliminary reading.

Additionally on Thursday, the ABS will issue June reports: Assets and Liabilities of Australian Securitisers and Managed Funds.

Overseas: US jobs and China business surveys in focus

A busy week lies ahead for US and Chinese economic data, especially surveys of purchasing managers and the
US jobs report on Friday.

The week kicks off on Saturday August 27 (technically a day before our weekly coverage) with data on Chinese industrial profits.

In the US, the week kicks off on Monday with the release of the Dallas Federal Reserve manufacturing index.

In the US on Tuesday, data on home prices is issued by both S&P/Case Shiller and the Federal Housing Finance Agency (FHFA). The Conference Board issues its survey of consumer confidence. The JOLTs series of job openings is also slated for release with the weekly Johnson Redbook chain store sales report and Dallas Federal

Reserve services index.

On Wednesday in the US, weekly data on mortgage applications is released from the Mortgage Bankers
Association (MBA) alongside the influential Chicago purchasing managers’ index and ADP employment data.
After lifting by 128,000 in July, analysts expect the ADP report to show a 200,000 rise in jobs during August.

In China, the ‘official’ purchasing managers’ indexes (PMIs) for manufacturing and services sector will be
released by the National Bureau of Statistics on Wednesday. And on Thursday the Caixin PMI for
manufacturing is expected. Chinese manufacturing activity is contracting.

Just like Australia, Thursday shapes as a big day for economic data in the US. Data on construction spending is released with Challenger job cuts and the final estimates of unit labour costs and productivity for the June quarter.

Additionally on Thursday in the US, the ISM and S&P Global PMIs for manufacturing are issued with the usual weekly data on claims for unemployment insurance (initial jobless claims).

On Friday, the keenly-awaited US jobs report for August is released. The main focus is non-farm payrolls or employment. Analysts estimate that 300,000 jobs may have been created in the month after the 528,000 bumper increase in July. But the report is much more than just jobs, also including hourly wages, weekly hours worked and unemployment. A softer 0.4 per cent lift in hourly wages is expected in August after the 0.5 per cent rise in July.

Also on Friday in the US, data on factory orders for July is issued.

Originally published by Craig James, Chief Economist