CommSec Chief Economist Craig James takes a look at the economic events scheduled for the week ahead, including RBA Board Minutes, Residential Property Prices data and a speech by the RBA Governor.
- There are no ‘top shelf’ indicators like retail sales or economic growth to be released in Australia over the coming week. But there are still plenty of indicators that can round out our knowledge about the economy.
- In Australia, the week kicks off on Monday with the Reserve Bank Governor, Philip Lowe, providing comments in a panel discussion at the 2017 Crawford Australian Leadership Forum in Canberra. The scheduled comments are due at 9.30am, so a good way to start off the week with fresh insights on the economy.
- Also on Monday the Australian Bureau of Statistics (ABS) release the May data on new vehicle sales. Industry data has already been released and it showed that sales were the highest for any May month.
- According to the Federal Chamber of Automotive Industries, new motor vehicle sales totalled 102,901 in May, up 6.4 per cent on a year ago.
- Passenger vehicles in May were up 1.6 per cent on a year earlier while sales of sports utility vehicles (SUVs) were up by 9.4 per cent and other vehicles were up by 9.9 per cent.
- On Tuesday, the CommBank business sales indicator is released together with the ABS data on residential prices while minutes of the last Reserve Bank Board meeting are also issued. And ANZ and Roy Morgan publish the usual weekly consumer confidence figures.
- The CommBank business sales index is a measure of economy-wide spending. Meanwhile the ABS data on home prices is a bit dated, covering the month of March. But the data includes estimates of the number of homes and the average number of people per home.
- Based on the data CommSec estimated that there were 2.476 people per home in December quarter 2016, down 0.4 per cent on a year ago. The number of people per home has been falling in annual terms for 2½ years.
- Surprisingly the number of homes in Australia grew by 172,800 in the year to December after recording annual gains of 185,800 in September and 182,400 in June. It was the smallest annual lift in homes for 15 months.
- The minutes of the Reserve Bank Board meeting are always closely dissected by analysts and investors. Comments on the job market, housing and the Federal Budget will attract most attention.
- And investors will monitor whether consumer confidence has continued its trend improvement over the past month.
- On Thursday, the ABS releases the usual detailed monthly data on the job market. However each quarter the ABS provides additional estimates on employment by industry, so the May data will be of interest.
- The May data should confirm that the Healthcare sector is the biggest employer in Australia.
Overseas: US Housing sector in focus
- The focus is very much on the housing sector in the coming week with new data to be released in China and the US in the coming week.
- The week begins on Monday in China with the May data on home prices. As has been the case across the globe, investors have been stepping up purchases of homes given the low interest rates on offer. Chinese home prices are currently 10.7 per cent higher than a year ago. Annual price growth peaked at 12.6 per cent in November and has been easing in the period since.
- In the US on Tuesday the broadest measure of trade – the current account – is released while the usual weekly data on chain store sales is also issued. The US trade accounts remain mired in red ink with the current account in deficit by US$112.4 billion in the December quarter. By comparison Australia’s current account is close to balance.
- In the US on Wednesday the usual weekly data on mortgage applications is released together with data on existing home sales. Economists expect that sales edged up from a 5.57 million annual rate to 5.60 million in May. Home sales were at decade highs of 5.7 million in March this year.
- On Thursday in the US the usual weekly data on claims for unemployment insurance is released with the Federal Housing Finance Agency data on home prices, the leading index and the Kansas City Federal Reserve survey. Home prices have been growing at a near 6 per cent annual pace for around two years.
- And on Friday in the US, data on new home sales is released. Home sales were at 9½-year highs in March and are trending near the highs. And the Markit “flash” readings on manufacturing and services sectors are released in the US, Europe and Japan – timely gauges on activity.
Craig James, Chief Economist, CommSec @CommSec
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