In the coming week, the economic data spotlight is firmly on wages (Wednesday) and the job market (Friday) – the last key indicators released before the election. In April, we expect that 20,000 jobs were created with the jobless rate stable at 5.0%.
The week kicks off on Monday when the Australian Bureau of Statistics (ABS) releases March data on overseas arrivals and departures. Tourist arrivals rose by 0.9 per cent in February, the strongest gain in five months while departures fell by 3.3%, the biggest fall in almost two years. Net permanent and long-term arrivals stood at a 5-year high of 299,100 in the year to February, up 11.4% on the year.
Also, on Monday the ABS issues home loan data within the publication “Lending to households and businesses” while the Reserve Bank issues the credit and debit card statistics for March. The value of home loans rose by 2.6% in February with the share of first home buyers in the market at 6-year highs.
On Tuesday, National Australia Bank issues its April business survey. In March the business conditions index rose from +4.2 points to +7.0 points, above the long-term average of +5.9 points. The business confidence index fell from +1.8 points to 0.4 points in March – a 5½-year low and below the long-term average of +5.8 points. The Roy Morgan-ANZ weekly measure of consumer sentiment is also released on Tuesday – a measure that has tracked a zig-zag course in recent months.
On Wednesday the all-important wage price index (WPI) is released – the main measure of wages in Australia. Wage growth has been edging higher over the past year and we expect that this continued in the March quarter. Wages may have lifted 0.6% in the quarter to be up 2.4% on the year. Also, on Wednesday the May consumer sentiment index is released. The sentiment gauge rose by 1.7% in April following the budget, but a flat reading is expected ahead of the election.
On Thursday the April job market data is expected. In March employment rose for the eighth straight month (only one fall in 30 months), up by 25,700. The unemployment rate rose from 4.9% to 5.0% in seasonally adjusted terms. In trend terms the jobless rate remained steady at a 10-year low of 5.0%.
Overseas: Chinese activity data in the spotlight
In China, the key monthly business activity data is the highlight (released Wednesday). While in the US there are no stand-outs. Over the week five Federal Reserve presidents deliver speeches.
The week begins on Monday in the US when data on consumer inflation expectations is released.
On Tuesday in the US, the National Federation of Independent Business (NFIB) releases its business optimism gauge. In March the index edged up to a three-month high but readings are well down from mid-2018. Also, on Tuesday, data on export and import prices are released with the regular weekly reading on chain store sales.
On Wednesday in the US, a bevy of data is released: retail sales, industrial production, and the Empire State manufacturing index, the National Association of Home Builders housing market index and capital flows data. The former two indicators are the ones to watch. Retail sales may have lifted just 0.1% in April after a 1.6% gain in March. Excluding autos though a more significant 0.8% increase in sales is expected. In terms of industrial production, a 0.2% increase is tipped for April after the 0.1% fall in March. On Wednesday in China, the monthly activity indicators are released – retail sales, production and investment. Each of the indicators was surprisingly strong in March.
Also, in China the house price index is scheduled for release on Thursday with lending indicators slated for Friday. On Thursday in the US data on housing starts & building permits is issued with the influential Philadelphia Federal Reserve manufacturing index and weekly figures on new claims for unemployment insurance. Starts were flat in March after a 12% fall in February. Economists tip a 6.5% lift in April starts.
On Friday in the US the Conference Board releases the leading index for April. A 0.4% increase is expected in the month. Also, on Friday the University of Michigan releases the preliminary consumer sentiment index for May. The index is healthy, just off four-month highs.
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