A quick look at where we’re at in the Australian economy ahead of today’s employment report (due at 0030GMT) – (previews here and here, and more here).
The question for the RBA is if we are seeing ‘transition’ in the Aussie economy from mining investment to other sectors. What does recent data show?
- Retail sales were up 0.7% m/m for November, nearly doubling forecasts (at +0.4%). On a y/y basis, they were up 4.6%
- Australia Building approvals for November were down 1.5% on the month (vs. expected -1.0%), with the y/y result up 22-odd percent
- November also saw a 7.5% increase in total seasonally adjusted new home sales (ps. the retails sales, building permits and new home sales for November is the most recent)
These results all look somewhat more positive than we have become accustomed to.
More recently:
- December New Motor Vehicle Sales showed +1.7% on the month, and +0.1% y/y. While the y/y growth couldn’t be any lower, at least it showed growth for the first time since July
Of more concern, though, is what PMI surveys are showing, with manufacturing and services both in the doldrums after a very brief post-election surge, construction the only sector with a positive pulse.
So, the data from November is certainly positive, but the recent survey data is not so much. Anyone at the RBA who asks “Are we there yet?” will likely be answered with a firm “No.”. (ps. My RBA interest rate outlook for the coming months is here)
