Australia: Jobs and confidence surveys are the highlights

In the coming week, Aussie job data and confidence surveys dominate the economic data docket.

The week kicks-off on Tuesday when the Commonwealth Bank (CBA) Household Spending Intentions (HSI) index
for June is issued alongside the Australian Bureau of Statistics (ABS) Household Spending Indicator for May.

Also on Tuesday, ANZ and Roy Morgan jointly issue the weekly consumer confidence survey. And Westpac and
the Melbourne Institute jointly release the July consumer confidence survey. The sentiment surveys will highlight consumer worries about rising inflationary pressures and interest rates. The main positive is the strength of the job market.

The ABS is scheduled to release the “Overseas Arrivals and Departures” publication on Tuesday, with the detailed May data supplemented by preliminary June figures.

 

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The National Australia Bank (NAB) issues its June business survey featuring updates on confidence and conditions on Tuesday. Both confidence and conditions eased in May, but remained above their long-run averages. Encouragingly, employment conditions hit a 10-month high.

On Wednesday, the ABS releases the “Building Activity” publication for the March quarter 2022. Of most interest is the data on dwelling starts or commencements as well as the ‘work yet to be done’ estimates.

And on Thursday, the ABS issues the all-important labour force survey for June. CBA Group economists expect around 25,000 jobs to be added in the month, with the unemployment rate easing from 3.9 per cent to 3.8 per cent, the lowest level since August 1974.

Overseas: US inflation and Chinese economic growth data in focus

In the coming week, US inflation data features alongside China’s headline-grabbing economic growth report.

The week kicks-off on Tuesday in the US with the release of June consumer inflation expectations data from the Federal Reserve Bank of New York. The May reading of 6.6 per cent matched the record high hit in March.

Also on Tuesday, the weekly Johnson Redbook chain store sales report is scheduled with the IBD/TIPP
economic optimism and National Federation of Independent Business (NFIB) small business optimism indexes. In May, the NFIB index fell to the lowest level since April 2020, with inflation and labour supply the top issues.

On Wednesday in China, international trade figures for June are scheduled. A recovery in transport capacity following Shanghai’s re-opening cleared the way for a pick up in May shipments.

On Wednesday in the US, consumer prices data will dominate investor attention. The Consumer Price Index
(CPI) rose by 1.0 per cent in May to be up 8.6 per cent over the year – the highest annual rate in 41 years. The core CPI (which excludes food and energy prices) rose by 0.6 per cent to be up 6.0 per cent over the year. Economists expect the headline CPI to lift another 1.0 per cent in June with the core measure up 0.5 per cent.

Also on Wednesday, weekly data on mortgage applications is released from the Mortgage Bankers Association alongside the US Federal Reserve Beige Book – detailing regional US economic activity and conditions – and the monthly budget statement. A US budget deficit of US$66.2 billion was posted in May.

On Thursday in the US, the usual weekly data on claims for unemployment insurance (initial jobless claims) will be issued with producer prices data for June. The measure of ‘final’ demand jumped by 0.8 per cent in May to be up 10.8 per cent on a year ago. And US banks JPMorgan Chase and Morgan Stanley issue latest earnings results.

On Friday in China, the economy – as measured by GDP – is expected to slow to an annual growth rate of just 1.4 per cent in the June quarter due to strict “Covid-zero” policy measures. While Shanghai’s lockdown has been lifted, consumer spending and activity in the services sector remains constrained by reduced people mobility. China’s distressed property sector is also weighing on economic activity.

That said, the removal of barriers along key transportation routes and supportive public spending boosted industrial production and fixed asset investment in May, with the June figures expected to show a further improvement. But unemployment remains elevated with targeted government fiscal policy measures combined with reduced borrowing costs from the People’s Bank of China, likely to support under-pressure consumers.

On Friday in the US, economists expect industrial production to edge higher by 0.2 per cent in June. But most attention will be on the health of the US consumer with the advance reading of retail sales and the release of the preliminary July University of Michigan consumer sentiment survey. Economists expect retail spending to remain resilient, increasing 0.8 per cent in June.

Also on Friday, the New York Empire State manufacturing index and business inventories report are also due. And US banks Wells Fargo and Citigroup are scheduled to release their earnings results.

Elsewhere, the Reserve Bank of New Zealand and Bank of Canada both hand down interest rate decisions on Wednesday.

Originally published by Ryan Felsman, Senior Economist, CommSec