Retail trade; Inflation gauge; Job ads
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Job ads down on last year.
Retail spending up: Retail trade rose by 0.8 per cent in September, well above market forecasts. Adjusting for inflation, retail trade rose by 0.7 per cent in the September quarter.
- Inflation contained: The TD Securities-Melbourne Institute monthly inflation gauge rose by just 0.1 per cent in October to stand 2.1 per cent higher than a year ago. The annual underlying measures were 2.2 per cent and 1.7 per cent.
- Job Advertisements fell by 0.1 per cent in October to be down 11.6 per cent on a year ago.
- House prices: The ABS measure of home prices rose by 1.9 per cent in the September quarter.
What does it all mean?
- Inflation is contained, enough said. The Reserve Bank could cut rates further but given strength in retail spending and home construction, it won’t.
- The Reserve Bank is focussed on the future. Home construction is lifting and the increase in activity will have multiplier effects across the economy. Further, business and consumer confidence is up as people get on with life now that the election is out of the road. And it appears that more confident Aussies are starting to spend again.
- The bottom line is that the economy is coming out of its election-induced slumber. Interest rates are well and truly on hold. And the Reserve Bank will have a job on its hands to keep the Aussie dollar down. The Aussie was near US95c after the retail trade data.
What do the figures show?
Retail trade
- Retail trade rose by 0.8 per cent in August – the strongest growth in seven months – after an upwardly-revised 0.5 per cent lift in spending in August. Retail spending is up 2.9 per cent on a year ago. In inflation adjusted terms retail spending grew by 0.7 per cent in the September quarter.
Inflation gauge:
- The monthly inflation gauge rose by 0.1 per cent in October after a 0.2 per cent gain in September. The annual rate of inflation was steady at 2.1 per cent.
- The underlying rate (trimmed mean) was unchanged in October following a 0.2 per cent gain in September. The annual rate eased from 2.4 per cent to 2.2 per cent.
- Excluding volatile items like petrol and fruit & vegetables, the inflation gauge rose by 0.2 per cent in October after a 0.1 per cent rise in September. The annual rate of inflation was steady at 1.7 per cent.
- TD Securities noted that “Contributing to the overall change in October were price rises for new dwelling purchase by owner-occupiers, non-alcoholic beverages, and meat and seafood. These were offset by falls in fruit and vegetables, automotive fuel, and furniture and furnishings. The price of automotive fuel fell by 2.0 per cent in October, and the price of fruit and vegetables fell by 0.6 per cent.”
Job advertisements:
- The combined number of internet and newspaper job advertisements, as tracked by ANZ, fell by 0.1 per cent in October to stand 11.6 per cent lower than a year ago. Job ads on the internet eased 0.1 per cent in October and were down 10.8 per cent on the year. Newspaper ads fell 0.2 per cent, to be down 29.9 per cent on the year.
