Westpac-Melbourne Institute Leading Index. Barely changed in May.
For the six month annualised growth rate, that comes in at 0+0.62% in May(prior +1.01%, revised from +1.17%)
Comments from Westpac:
The index is pointing to a clear slowing in momentum.
- Growth rate remains comfortably above trend, the pace has eased markedly since the start of the year.
Two components have driven the slowdown: commodity prices and the yield spread.
- After surging 44% between June and February, Australia's commodity prices have declined 10% over the last three months
- The yield spread - the difference between the short and long term interest rates - captures financial market assessments of the economic outlook both locally and abroad (long term rates are heavily influenced by benchmark rates abroad).
- After widening significantly over the second half of 2016, the yield gap has narrowed sharply in 2017, led by lower 10yr bond rates as markets have pared back expectations for growth stimulus policies in the US.
Domestic components have boosted the Index growth rate between December and May although individual contributions have varied widely.
- The positive signals have been from dwelling approvals (adding +0.29ppts); and aggregate hours worked (+0.17ppts), partially offset by weaker reads from the S&P/ASX 200; Westpac-MI UE index and Westpac-MI CSI expectations index (a combined drag of -0.13ppts).
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I've said before this indicator is one of my favourites.