This week we delve into the latest national accounts figures on consumer spending to try to assess just how weak consumer spending is.
Author
Ivan Colhoun
“Ivan writes for NAB's daily and weekly economics and market reports, and regularly speaks with the media about the economy and financial market.”
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.
Recently Published Articles
AMW – Some favourable signs for inflation in Australian capacity use figures but labour market still very tight
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.
AMW – July RBA Board decision again likely to be a very close call
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.
AMW – What assumptions to use for my 2023-24 budget?
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
AMW – Deep Dive – Examining progress rebalancing demand and supply in Australia
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.
AMW – How sticky will Australian inflation be?
The Australian budget Tuesday night is likely to feature a small surplus for the current financial year...
AMW: Silicon Valley Bank developments overtake RBA
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.
AMW: The RBA, Fed, labour markets and inflation
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.
AMW: 2023 outlook: Five big questions to be answered
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.
AMW: Supply chain update, price reductions in coming months
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.
AMW: Business conditions and consumer sentiment
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.
AMW: Two large, overlapping shocks and MP decision
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.
AMW: Fed Pressure Index has correctly signalled inflationary pressures
In this weekly, we look at some indicators that might reliably provide warning of some unwind or easing of the supply chain disruptions.
AMW: RBA: the top ten reasons we expect today’s interest rate increase to be 25bps
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.
AMW: Delving deeper into the NAB Survey on costs & prices
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.
AMW: A baker’s dozen of questions on Australian monetary policy
The RBA Board meets tomorrow in a meeting now widely expected to see the first increase in interest rates since November 2010.
AMW: Russia/Ukraine update: adding to existing price pressures
Brent oil is up 30% on the week to US$130 a barrel and wheat, thermal coal and gas prices have also surged.
AMW: What more do we now know from the RBA?
The RBA made a second major change to their forecasts for inflation and unemployment in three months
AMW: Why don’t markets believe the RBA?
Markets might be right on the interest rate outlook.
AMW: Closed borders suggest Australia’s labour market will remain (temporarily) very tight
There are now less than two unemployed people for every job vacancy in Australia, a record low for this ratio.
AMW: How to assess the Australian budget
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.
AMW: A 2-year yield target as an exit strategy from the 3-year yield target?
This week we review the range of views within NAB’s research teams about the future of various conventional and unconventional monetary policy settings.
AMW: COVID outbreak under control
Some small short-term cost to growth due to shutdowns and border re-closures, but medium-term outlook remains brighter.
AMW: Australia China trade tensions
The Weekly provides an update on the China-Australia trade and the diplomatic dispute.
AMW: Labour market recovering more quickly than expected
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.
AMW: unusual recovery in job advertising in the smaller states
Many of the smaller states’ economies are benefiting from both better virus numbers along with relatively smaller exposures to business services.
AMW: Which states are performing best and why?
The Weekly looks at how the various Australian states have been performing.
Australian Markets Weekly: the main questions asked about the Australian economy
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.
Australian Markets Weekly: RBA – Inflation-targeting with low unemployment
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.
Australian Markets Weekly: RBA – watching world, labour market & consumption
The RBA sees no interest rate rise as likely this year but an increase possible at some stage next year.
Australian Markets Weekly – Could the economy grow more quickly? Is progress at risk of becoming too slow?
In this Weekly, we take a closer look at the issues the RBA Board will face at its meeting tomorrow.
Australian Markets Weekly – 2018 wrap and 2019 thoughts
In today’s Weekly – our last for 2018 – we cover these developments as we wrap up 2018, and look forward to 2019.
Podcast: NAB Monthly Business Survey, November 2018
The latest NAB business survey shows further weakness in business conditions.
Australian Markets Weekly – No signs of underlying consumer softening
RBA Deputy Governor Guy Debelle gave a very interesting speech in Sydney last Thursday night. We consider some of the key takeaways.
Australian Markets Weekly – Trends in Profitability – mining powering gains
The Weekly delves into trends in profitability following the release of ABS quarterly Business Indicators data,
Podcast: NAB Monthly Business Survey, October 2018
Ivan Colhoun, NAB’s Chief Economist, Markets, talks through the findings in the latest NAB Business Survey.
Australian Markets Weekly – Views on Australia (and NZ) from UK/Europe
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.
Australian Markets Weekly – housing correction but no macro downturn
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 Weekly – Under new management!
Australian markets started this week with a new Prime Minister. The Weekly looks at eight key issues for business and investors to consider.
Australian Markets Weekly – Unemployment & wages heading in right direction
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.
Australian Markets Weekly – Mid-year economy and market pulse check
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.
Australian Markets Weekly – More on bank lending standards
In today’s Weekly we review the important speech by APRA Chair Wayne Byres last week, which covered developments in housing lending standards.
Australian Markets Weekly – Funding pressures, BBSW/Y and monetary policy
Today’s Weekly considers the implications of the recent increases in Australian money market rates for the RBA/monetary policy.
Australian Markets Weekly – USD Outlook: It’s Complicated
In today’s weekly, and as President Trump and Kim Jong Un meet in Singapore, we look at the outlook for the US$.
Australian Markets Weekly – US price pressures and labour market tightness
There is expected to be continuing downward pressure on the AUD from interest rate differentials given higher US yields.
Australian Markets Weekly – NAB delays first rate hike until mid-2019
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.
Australian Markets Weekly: 19 March 2018
Alternative measures of labour market tightness.
Australian Markets Weekly: 23 February 2018
How fast is WA recovering?
Australian Markets Weekly: 29 January 2018
What does Canada tell us about the RBA?
Australian Markets Weekly: 22 January 2018
Employment good news to start 2018.
Australian Markets Weekly: 18 December 2017
Population growth remains very strong – QLD strengthening.
Australian Markets Weekly: 30 October 2017
Inflation – what does the latest CPI tell us?
Australian Markets Weekly: 11 September 2017
What does the Bank of Canada mean for the RBA?
Australian Markets Weekly: 14 August 2017
Looking for improvement in SA, QLD and WA.
Australian Markets Weekly: 31 July 2017
The reasons for slow wages growth in Australia and around the world is a topic occupying the minds of central bankers.
Australian Markets Weekly: 24 July 2017
RBA unlikely to begin to normalise interest rates this year unless unemployment begins to fall sharply soon.
Australian Markets Weekly: View from the US
Strong focus on the implications of the beginning of normalisation of rates by the Bank of Canada.
Australian Markets Weekly: 3 April 2017
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.
Australian Markets Weekly: 13 March 2017
What can the history of Australian monetary policy tell us about the current monetary policy debate?
Australian Markets Weekly: 13 February 2017
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
Australian Markets Weekly: 6 February 2017
Fed pressure index signalling upside risks for US inflation and interest rates?
Australian Markets Weekly: 30 January 2017
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)?
Australian Markets Weekly: 12 December 2016
How fast (or slow) is Australian employment growth?
Australian Markets Weekly – 31 October 2016
This week we report on the views of Japanese clients of Australia following a recent trip to the country.
Australian Markets Weekly: 24 October 2016
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.
Australian Markets Weekly – At the bottom of the mining cycle?
In this weekly, we look at a number of indicators that are increasingly suggesting we are broadly at the bottom of the mining cycle.
Australian Markets Weekly: 26 September 2016
Attached to this week’s publication is a detailed slide pack covering the latest trends in Australia’s population.
Australian Markets Weekly: 5 September 2016
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.
Australian Markets Weekly: 15 August 2016
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.
Australian Markets Weekly: 25 July 2016
Over the past few years, the rate of increase of Australian house prices has at times been of concern to the RBA.
Australian Markets Weekly: 11 July 2016
SA economy making progress; NAB survey, Employment and BoE this week
Australian Markets Weekly: 4 July 2016
The early part of last week saw a continuation of post-Brexit equity market weakness, falling bond yields and generally heightened uncertainty.
Australian Markets Weekly: 27 June 2016
It’s now nearly 72 hours since British voters voted to exit the European Union and we examine the aftermath of this decision.
Australian Markets Weekly: 6 June 2016
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
Australian Markets Weekly – 30 May 2016
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.
Australian Markets Weekly – 16 May 2016
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.
Australian Markets Weekly – NAB survey and employment data suggest little pressure for near-term RBA rate cut
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
Australian Markets Weekly: 4 April 2016
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.
Australian Markets Weekly – NAB business survey and RBA speech
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.
Australian Markets Weekly:The impact of oil complicates the outlook
The impact of oil complicates the outlook.
Australian Markets Weekly – Low inflation but interest rates fine at current levels
The markets make significant reversals on little fundamental developments, suggesting positioning and sentiment had become extreme.
Australian Markets Weekly – Offshore investors less negative on Australia
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.
Australian Markets Weekly: Are wages reaching a new low?
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.
Australian Markets Weekly: A cyclical turn in unemployment?
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)
Australian Markets Weekly: Independent interest rate increases
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.
Australian Markets Weekly: Australia = ∑ many cycles
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.
Australian Weekly Markets – an offshore outlook
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.
Australian Markets Weekly: More on the employment conundrum
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.
Australian Markets Weekly: Something for everyone
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.
Australian Markets Weekly: A different answer to Glenn’s conundrum
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.
Australian Markets Weekly: RBA minutes, CPI and RBA Governor Speech
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.
Australian Markets Weekly: Greece, China, RBA and the Labour Market
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.
Australian Markets Weekly: Greek tragedy and postcard from Asia
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.
Australian Markets Weekly – sharp lift in non-mining job advertising in April
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.
Australian Markets Weekly – Evidence of transition in the Australian economy
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.
Australian Markets Weekly: Can we believe the ABS labour market data?
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
Australian Markets Weekly: Record employment and the NAB survey
Two big pieces of Australian data this week ahead of next week’s RBA Minutes and the Q1 CPI
Australian Markets Weekly: Fed now not impatient – RBA patient in March
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.
Australian Markets Weekly: Onshoring and US rate rise proximate
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.
Australian Markets Weekly: RBA and non-farm payrolls the key
A huge week is in prospect as markets await the RBA board’s March deliberations on Tuesday with keen interest.
Australian Markets Weekly: Fed a step closer to lift-off
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.
RBA: “On balance” cuts 25bps to 2.25%
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.
Australian Markets Weekly: Monetary Policy
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.