This week we delve into the latest national accounts figures on consumer spending to try to assess just how weak consumer spending is.
![AMW – How weak is consumer spending?](https://business.nab.com.au/wp-content/uploads/2023/08/australian-markets-weekly-934x654.png)
Author
Ivan Colhoun is Chief Economist, Markets for National Australia Bank. He joined NAB in November 2014 and is responsible for the Australian Economics function within the Global Markets Research team.
Ivan has had a long and varied career in Economics. He received a Bachelor of Economics with Honours from the University of Tasmania and commenced his career at the Reserve Bank of Australia.
He spent 15 years at Deutsche Bank finishing as Chief Economist for Australia and Head of Global Markets Research for Australia/NZ, before following his passion for aviation by joining Qantas as Chief Economist.
Most recently, Ivan was Chief Economist for Australia for ANZ Bank. He has also consulted to SEEK, Virgin Australia and IATA.
This week we delve into the latest national accounts figures on consumer spending to try to assess just how weak consumer spending is.
We examine the aggregate and disaggregated measures of capacity utilisation in the NAB Business Surveys in greater detail in this week’s Australian Markets Weekly.
This week we consider tomorrow’s RBA board meeting, but also US data releases that are likely to be more relevant for how the US economy and labour markets develop over the next 6-12 months.
This week we examine some possible budget assumptions for Australian growth, inflation, wages, interest rates and the $A for 2023-24 as well as the context, thinking behind and risks to the forecasts
The Markets Economics team looks at the progress rebalancing supply and demand in Australia and find that Australia is likely to lag the progress being made in the US on rents, energy and wages/services.
The Australian budget Tuesday night is likely to feature a small surplus for the current financial year...
This week, we consider the likelihood of further tightening by the RBA and what impact - if any - the recent failure of Silicon Valley Bank might have.
With many competing influences in the global macro backdrop, in this Weekly we take a step back and outline a framework for how we are making sense of the world.
In today’s weekly, we suggest a framework for sifting through the various forces buffeting the 2023 outlook and pose five big questions that we think need to be answered to judge how the economy and central bank policy will evolve in 2023.
This week we provide a further update on supply chain disruptions and highlight a few areas where businesses might reasonably expect some lower prices from suppliers in coming months.
Markets will be looking for any clues from the RBA Board Minutes as to whether the RBA might step down from its 50bps rises back to 25bps.
NAB expects the fourth successive 50bps interest rate increase to be announced on Tuesday as the RBA moves policy back to a more neutral level.
In this weekly, we look at some indicators that might reliably provide warning of some unwind or easing of the supply chain disruptions.
The RBA’s Board meets today and a further interest rate increase is unanimously expected by market economists with the size of the rate increase uncertain.
It’s clear that with unemployment close to full employment levels and inflation way above target and forecast to rise higher, Australian interest rate settings should no longer be anywhere close to the emergency low settings implemented in the pandemic.
The RBA Board meets tomorrow in a meeting now widely expected to see the first increase in interest rates since November 2010.
Brent oil is up 30% on the week to US$130 a barrel and wheat, thermal coal and gas prices have also surged.
The RBA made a second major change to their forecasts for inflation and unemployment in three months
Markets might be right on the interest rate outlook.
There are now less than two unemployed people for every job vacancy in Australia, a record low for this ratio.
The Federal Budget will continue phase 1 of the Government’s fiscal strategy which seeks to secure Australia’s economic recovery from COVID by growing the economy to lower unemployment.
This week we review the range of views within NAB’s research teams about the future of various conventional and unconventional monetary policy settings.
Some small short-term cost to growth due to shutdowns and border re-closures, but medium-term outlook remains brighter.
The Weekly provides an update on the China-Australia trade and the diplomatic dispute.
Traditionally the labour market has been a lagging indicator of activity. However, in this pandemic it is largely contemporaneous and is thus a good summary indicator of the wider economy as well as being timely given new data sets such as weekly payrolls and regular job ad updates by SEEK and Indeed.
Many of the smaller states’ economies are benefiting from both better virus numbers along with relatively smaller exposures to business services.
The Weekly looks at how the various Australian states have been performing.
This week, we thought it might be interesting to discuss the most common questions we are getting asked by businesses and investors on the outlook for the Australian economy.
The RBA’s central case of further progress in lowering both unemployment and inflation has been challenged by weak GDP growth and now weak underlying inflation.
The RBA sees no interest rate rise as likely this year but an increase possible at some stage next year.
In this Weekly, we take a closer look at the issues the RBA Board will face at its meeting tomorrow.
In today’s Weekly – our last for 2018 – we cover these developments as we wrap up 2018, and look forward to 2019.
The latest NAB business survey shows further weakness in business conditions.
RBA Deputy Governor Guy Debelle gave a very interesting speech in Sydney last Thursday night. We consider some of the key takeaways.
The Weekly delves into trends in profitability following the release of ABS quarterly Business Indicators data,
Ivan Colhoun, NAB’s Chief Economist, Markets, talks through the findings in the latest NAB Business Survey.
This week, we report on the main points of interest of UK and European investors on the Australian and NZ economies following a marketing trip there.
This week, we thought we would look in brief at two important issues and how they are impacting the Australian economy and financial markets.
Australian markets started this week with a new Prime Minister. The Weekly looks at eight key issues for business and investors to consider.
Last week’s data revealed the slightest improvement in annual wages growth and a welcome further decline in the unemployment rate to a six-year low.
Today’s weekly includes the results of our recent survey of our readers' views and outlooks for the Australian economy and key financial market indicators.
In today’s Weekly we review the important speech by APRA Chair Wayne Byres last week, which covered developments in housing lending standards.
Today’s Weekly considers the implications of the recent increases in Australian money market rates for the RBA/monetary policy.
In today’s weekly, and as President Trump and Kim Jong Un meet in Singapore, we look at the outlook for the US$.
There is expected to be continuing downward pressure on the AUD from interest rate differentials given higher US yields.
The change reflects the fact there's no sign as yet of stronger wages growth and unemployment has been stuck at around 5.5% for the best part of a year. We still expect the economy to strengthen, leading to a declining unemployment rate.
Alternative measures of labour market tightness.
How fast is WA recovering?
What does Canada tell us about the RBA?
Employment good news to start 2018.
Population growth remains very strong – QLD strengthening.
Inflation – what does the latest CPI tell us?
What does the Bank of Canada mean for the RBA?
Looking for improvement in SA, QLD and WA.
The reasons for slow wages growth in Australia and around the world is a topic occupying the minds of central bankers.
RBA unlikely to begin to normalise interest rates this year unless unemployment begins to fall sharply soon.
Strong focus on the implications of the beginning of normalisation of rates by the Bank of Canada.
With house prices rising, vacancy rates declining and a previous drop in building approvals, it’s likely that residential construction activity should begin to strengthen.
What can the history of Australian monetary policy tell us about the current monetary policy debate?
The Australian budget in the first six months of this financial year is tracking a little higher, but not significantly worse than recent budget forecasts
Fed pressure index signalling upside risks for US inflation and interest rates?
While we are receiving many questions about the impact of President Trump’s policies on the outlook for the US and global economies and markets, the most frequent question we are being asked about Australia is “why is NAB forecasting two interest rate cuts in 2017” (in May and August)?
How fast (or slow) is Australian employment growth?
This week we report on the views of Japanese clients of Australia following a recent trip to the country.
With the RBA a keen inflation targetter, albeit within a flexible medium-term framework, each quarterly CPI reading provides an important update on current inflation trends and is a key input into the Bank’s forecasts.
In this weekly, we look at a number of indicators that are increasingly suggesting we are broadly at the bottom of the mining cycle.
Attached to this week’s publication is a detailed slide pack covering the latest trends in Australia’s population.
This week, we thought we would focus on three themes: (i) Friday night’s US labour market data; (ii) this week’s upcoming Australian Q2 GDP data; and (iii) some thoughts on apartment settlements.
Spare capacity in the labour market seems to have been an important part of the RBA’s recent decision to lower the cash rate further. The linkage is low wages growth – which reflects this spare capacity – and which, as a key determinant of prices, impacts on the RBA’s outlook for inflation.
Over the past few years, the rate of increase of Australian house prices has at times been of concern to the RBA.
SA economy making progress; NAB survey, Employment and BoE this week
The early part of last week saw a continuation of post-Brexit equity market weakness, falling bond yields and generally heightened uncertainty.
It’s now nearly 72 hours since British voters voted to exit the European Union and we examine the aftermath of this decision.
Is any week not a relatively busy or important one? This week, the key focus in Australia will be on the Reserve Bank’s June Board meeting
The past week has seen interest rate markets continue to receive warnings from various Fed speakers – including Fed Chair Yellen – that US interest rates are likely to rise in the next few months.
It was a quieter week for Australian markets after the previous week’s very large moves. The Australian dollar still ended the week lower, as markets continued to speculate that the RBA will follow up with another interest rate cut in the months ahead and as Chinese economic data disappointed.
The latest NAB business survey and labour market data accord well with the RBA’s policy stance – low inflation provides ample scope to ease monetary policy further should that be necessary to support the economy, though activity and labour market data do not suggest that such a move is necessary
The key Australian event of the week will be the RBA Board Meeting tomorrow along with a speech by RBA Assistant Governor Kent on Wednesday.
Price developments over the past week supportive of NAB view that markets had become overly pessimistic on the growth outlook – commodities, equities and the $A all rally strongly; bond yields rise sharply.
The impact of oil complicates the outlook.
The markets make significant reversals on little fundamental developments, suggesting positioning and sentiment had become extreme.
An important week as Australian markets prepare to wind down for Xmas and the summer holidays, with the MYEFO Budget outlook on Tuesday expected to reveal a mild worsening in this year’s deficit to $38bn and to bring to account lower long-term growth assumptions.
An important week for Australia, with a speech by the RBA Governor Tuesday, the release of key investment figures that feed into next week’s GDP, as well as the latest survey of investment intentions for 2015-16.
We review last week’s stunning Australian labour market data. While we don’t believe the large moves in either the employment or unemployment rate, we believe the signals - that employment is strengthening (driven by NSW and importantly an improving trend for QLD)
In this weekly, we consider the implications for monetary policy of last week’s independent mortgage rate increases by Westpac. RBA expected to watch how other intermediaries respond to the move and to assess how the move impacts the economy.
In this weekly we examine through the lens of job advertisements, the net effect for the labour market – and by implication the broader economy – of the many conflicting cycles currently impacting the evolution of the Australian economy.
In this Weekly we have included trip notes and reflections from Ivan Colhoun, Chief Economist, Markets, who has been visiting clients in the UK, Europe and the Middle East.
Noteworthy developments last week from the RBA, were: (i) the Deputy Governor attribute most of the recent increase in Australian house prices to an increase in land prices; and (ii) Assistant Governor Chris Kent add the composition of recent Australian growth (and possible mismeasurement issues for services growth) to the list of explanations as to why Australian employment and unemployment outcomes had outperformed expectations despite as expected relatively slow GDP growth.
This week we attempt to interpret the latest developments in the large and complex range of conflicting influences impacting on the Australian economy and financial markets. It’s fair to say there is something for everyone in the latest data and policy pronouncements.
This week we focus on two important developments from last week. The Governor (and Board’s) conundrum about unemployment rates and the implications for the Australians market.
We suspect little flow on for Australian rate pricing from the RBNZ and BoC moves – central banks are responding to their domestic circumstances, and the Australian economy, so far, continues to perform better than expected.
This week we look at: the Greek vote; recent developments in Chinese equity markets; the RBA’s July Board meeting; and upcoming important Australian labour market releases for June, with ANZ and SEEK job ads released this week and the monthly ABS labour market data on Thursday.
This week we cover the weekend’s events in Greece and China along with impressions from Asian investors following a two-week trip marketing Australia through Singapore, Hong Kong, Tokyo and China.
This week we look at the 4.9% rise in SEEK new job advertisements recorded in April; and two important aspects of the Australian Budget – the likely impact on confidence; and the continued reliance of the Budget forecasts on a recovery in revenues.
This week we look at the latest US payrolls data, the Australian Budget and how some of the main monthly economic indicators suggest the transition in the Australian economy from mining investment led growth to non-mining growth is progressing.
That is a key question for investors seeking to work out whether the RBA will ease again at the May Board meeting and furthermore whether the market is correct in pricing nearly two full interest rate cuts by February 2016
Two big pieces of Australian data this week ahead of next week’s RBA Minutes and the Q1 CPI
This week we look at: •The latest US FOMC statement and its implications; •The RBA Minutes, which reveal the Bank considered further reducing rates in March, but decided against moving at that meeting. How much longer might they be patient?; •The latest industry employment data to see how this fits with our view of the Australian economy; and •The main events coming up this week.
Covers the implications of Friday’s stronger-than-expected US non-farm payrolls, previews important Australian Labour Market data and reports on increasing anecdotes that the lower $A is beginning to boost the domestic economy through onshoring.
A huge week is in prospect as markets await the RBA board’s March deliberations on Tuesday with keen interest.
The week opens with two conflicting pieces of economic news for markets, the strong US payrolls report and weak China trade data. NAB has also revised lower its $A forecasts. Friday’s US non-farm payrolls report for January surprised on the high side.
The RBA’s Board has made the decision to reduce rates earlier than NAB expected, but for similar reasons we expected a modest rate reduction in March. It suggests growth will be below trend for somewhat longer – and the unemployment rate will peak a little higher – than earlier expected.
Another big week coming up, with the RBA’s first Board meeting of the year tomorrow, the much-awaited retail sales reading for December on Thursday, the RBA’s February Statement of Monetary Policy on Friday and US non-farm payrolls data for January on Friday night.
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