Westpac Economics Australia & NZ Weekly

The take out from last week's Q1 GDP report was the weakness apparent in household consumption. Combined with the poor 2015/16 Capex print the week before, the GDP report highlighted that the risks to the outlook for the Australian economy and the RBA policy outlook are to the downside. Key for the outlook then is how the consumer confidence and labour market trends perform in coming months. This week we receive a timely update on both fronts. Particularly key for consumer confidence are households' perceptions of the labour market and their finances as well as their willingness to spend on major household items. On the labour force survey, Westpac and the market both expect a modest jobs gain circa 12k in May, leaving the unemployment rate unchanged at 6.2%. Over in NZ, all eyes will be on the RBNZ as they assess the stance of policy. The majority (including Westpac) expect 'no change', but with a conditional easing bias retained. (VIEW LINK)