AdviserVoiceComsec Archives - AdviserVoice https://www.adviservoice.com.au/tag/comsec/ Financial planner information & financial planner education/CPD - AdviserVoice Thu, 11 Jun 2026 21:30:14 +0000 en-US hourly 1 https://wordpress.org/?v=7.0 Reserve Bank ponders next move https://www.adviservoice.com.au/2013/08/reserve-bank-ponders-next-move/ https://www.adviservoice.com.au/2013/08/reserve-bank-ponders-next-move/#respond Tue, 06 Aug 2013 21:45:38 +0000 https://adviservoice.com.au/?p=23703

RBA cuts interest rates by 25 basis points.

Reserve Bank Board meeting

  • The Reserve Bank Board has cut the official cash rate by 25 basis points or a quarter of a per cent to 2.50 per cent. It was the first rate cut since May and keeps official rates at the lowest levels recorded in 53 years. It was the first cut in official interest rates in an election period. The Reserve Bank has signalled that rates are on hold for now. The next RBA Board meeting is on September 4 2013.
  • While the cash rate has fallen to the lowest levels in more than 50 years, key lending rates like the bank variable housing rate are still above historic lows. If the rate cut is passed on, the variable rate would fall to 5.95 per cent, still above the 41-year low of 5.75 per cent that existed from April-May 2009.

What does it all mean?

  • There was one subtle change in the wording of the accompanying statement. Rather than leaving scope for further rate cuts, the Reserve Bank now says it is happy to wait for a while before acting again. It is our belief that the economy will pick up after the election. The Reserve Bank is also waiting to see what happens post-election.
  • At 2.50 per cent, the cash rate is broadly equivalent to official rates that existed in late 1959/early 1960. But a key reason why the cash rate is at current levels is because banks were constrained from passing on in full the rate cuts delivered from 2008-2013. In more “normal” times, the official cash rate would currently be around 4.00-4.25 per cent – similar to the low reached in December 2001.
  • In gauging how “loose” monetary policy settings are, the Reserve Bank focuses on key lending rates like the variable housing rate and small business overdraft rate. If today’s rate cut gets passed on in full, the variable housing rate would still be around 20 basis points above the lows set in the global financial crisis and around 1 percentage point above the lows set in 1959 and 1960.
  • Monetary policy is supporting economic growth but interest rate levels are by no means at “emergency” levels. Simply, with inflation contained, the mining boom easing and the global economy still getting back on its feet, we can have stimulatory monetary policy settings in Australia.
  • The Reserve Bank Governor has suggested that the new “normal” level of the cash rate could be lower than in the past. Certainly if inflation can be contained between 2-3 per cent, a “normal” cash rate could be around 3.5-4.0 per cent rather than levels near 5.5 per cent.
    • The Reserve Bank Board has cut the cash rate by 25 basis points to 2.50 per cent. The previous rate cuts were in May 2013 (25 basis points), December 2012 (25 basis points), October 2012 (25 basis points), June 2012 (25 basis points), May 2012 (50 basis points) and November and December 2011 (each by 25 basis points). Prior to those moves the Reserve Bank had previously lifted rates seven times from October 2009 to November 2010 – a total of 1.75 percentage points, from 3.00 per cent to 4.75 per cent.
    • In the last rate-cutting cycle, the cash rate fell to a low of 3.00 per cent in April 2009. In the previous rate-cutting cycle the cash rate fell to 4.25 per cent in December 2001. In the two previous rate-cutting cycles, the cash rate fell to lows of 4.75 per cent.
    • The Reserve Bank looks more closely at the variable housing rate to gauge how close rates are to “normal”. If variable housing rates of major banks fall to 5.95 per cent, this would be below the long-term average or “normal” rate of 7.20 per cent but still above the 41-year low of 5.75 per cent recorded in April-May 2009.
      • CommSec hopes that this is the last interest rate cut in the cycle. If borrowers cannot afford repayments at these levels then it is doubtful that they should be borrowing at all. Cash rates are at historic lows at present but will eventually rise over the next few years as domestic and global economies recover.
      • Low interest rates, combined with a weaker Aussie dollar, are acting to support growth in the economy. It is up to businesses and consumers to respond to the attractive settings. But it all gets down to confidence. We wouldn’t expect the economy to lift markedly until the Federal Election has been run and won.
      • Savers need to apply more thought about where they put their savings. That is a key message from the Reserve Bank Governor. Encouragingly the Reserve Bank Governor is not concerned about an “asset bubble” – unsustainable growth of property prices. Simply, attitudes towards debt are far different than in the past with consumers and businesses far more conservative.
      • This is the first rate cut in an election period. But just like the last election period when rates were increased, the rate move was well flagged, supported by all economists and justifiable.
      • The statement from the July meeting is on the right; the statement from today’s August 2013 meeting is on the left. Emphasis has been added to significant changes in wording in the recent statement.

Interest rate decision and past cycles

  • The Reserve Bank Board has cut the cash rate by 25 basis points to 2.50 per cent. The previous rate cuts were in May 2013 (25 basis points), December 2012 (25 basis points), October 2012 (25 basis points), June 2012 (25 basis points), May 2012 (50 basis points) and November and December 2011 (each by 25 basis points). Prior to those moves the Reserve Bank had previously lifted rates seven times from October 2009 to November 2010 – a total of 1.75 percentage points, from 3.00 per cent to 4.75 per cent.
  • In the last rate-cutting cycle, the cash rate fell to a low of 3.00 per cent in April 2009. In the previous rate-cutting cycle the cash rate fell to 4.25 per cent in December 2001. In the two previous rate-cutting cycles, the cash rate fell to lows of 4.75 per cent.
  • The Reserve Bank looks more closely at the variable housing rate to gauge how close rates are to “normal”. If variable housing rates of major banks fall to 5.95 per cent, this would be below the long-term average or “normal” rate of 7.20 per cent but still above the 41-year low of 5.75 per cent recorded in April-May 2009.

What are the implications of yesterday’s decision?

  • CommSec hopes that this is the last interest rate cut in the cycle. If borrowers cannot afford repayments at these levels then it is doubtful that they should be borrowing at all. Cash rates are at historic lows at present but will eventually rise over the next few years as domestic and global economies recover.
  • Low interest rates, combined with a weaker Aussie dollar, are acting to support growth in the economy. It is up to businesses and consumers to respond to the attractive settings. But it all gets down to confidence. We wouldn’t expect the economy to lift markedly until the Federal Election has been run and won.
  • Savers need to apply more thought about where they put their savings. That is a key message from the Reserve Bank Governor. Encouragingly the Reserve Bank Governor is not concerned about an “asset bubble” – unsustainable growth of property prices. Simply, attitudes towards debt are far different than in the past with consumers and businesses far more conservative.
  • This is the first rate cut in an election period. But just like the last election period when rates were increased, the rate move was well flagged, supported by all economists and justifiable.

Comparing the two most recent statements

  • The statement from the July meeting is on the right; the statement from today’s August 2013 meeting is on the left. Emphasis has been added to significant changes in wording in the recent statement.
]]>

RBA cuts interest rates by 25 basis points.

Reserve Bank Board meeting

  • The Reserve Bank Board has cut the official cash rate by 25 basis points or a quarter of a per cent to 2.50 per cent. It was the first rate cut since May and keeps official rates at the lowest levels recorded in 53 years. It was the first cut in official interest rates in an election period. The Reserve Bank has signalled that rates are on hold for now. The next RBA Board meeting is on September 4 2013.
  • While the cash rate has fallen to the lowest levels in more than 50 years, key lending rates like the bank variable housing rate are still above historic lows. If the rate cut is passed on, the variable rate would fall to 5.95 per cent, still above the 41-year low of 5.75 per cent that existed from April-May 2009.

What does it all mean?

  • There was one subtle change in the wording of the accompanying statement. Rather than leaving scope for further rate cuts, the Reserve Bank now says it is happy to wait for a while before acting again. It is our belief that the economy will pick up after the election. The Reserve Bank is also waiting to see what happens post-election.
  • At 2.50 per cent, the cash rate is broadly equivalent to official rates that existed in late 1959/early 1960. But a key reason why the cash rate is at current levels is because banks were constrained from passing on in full the rate cuts delivered from 2008-2013. In more “normal” times, the official cash rate would currently be around 4.00-4.25 per cent – similar to the low reached in December 2001.
  • In gauging how “loose” monetary policy settings are, the Reserve Bank focuses on key lending rates like the variable housing rate and small business overdraft rate. If today’s rate cut gets passed on in full, the variable housing rate would still be around 20 basis points above the lows set in the global financial crisis and around 1 percentage point above the lows set in 1959 and 1960.
  • Monetary policy is supporting economic growth but interest rate levels are by no means at “emergency” levels. Simply, with inflation contained, the mining boom easing and the global economy still getting back on its feet, we can have stimulatory monetary policy settings in Australia.
  • The Reserve Bank Governor has suggested that the new “normal” level of the cash rate could be lower than in the past. Certainly if inflation can be contained between 2-3 per cent, a “normal” cash rate could be around 3.5-4.0 per cent rather than levels near 5.5 per cent.
    • The Reserve Bank Board has cut the cash rate by 25 basis points to 2.50 per cent. The previous rate cuts were in May 2013 (25 basis points), December 2012 (25 basis points), October 2012 (25 basis points), June 2012 (25 basis points), May 2012 (50 basis points) and November and December 2011 (each by 25 basis points). Prior to those moves the Reserve Bank had previously lifted rates seven times from October 2009 to November 2010 – a total of 1.75 percentage points, from 3.00 per cent to 4.75 per cent.
    • In the last rate-cutting cycle, the cash rate fell to a low of 3.00 per cent in April 2009. In the previous rate-cutting cycle the cash rate fell to 4.25 per cent in December 2001. In the two previous rate-cutting cycles, the cash rate fell to lows of 4.75 per cent.
    • The Reserve Bank looks more closely at the variable housing rate to gauge how close rates are to “normal”. If variable housing rates of major banks fall to 5.95 per cent, this would be below the long-term average or “normal” rate of 7.20 per cent but still above the 41-year low of 5.75 per cent recorded in April-May 2009.
      • CommSec hopes that this is the last interest rate cut in the cycle. If borrowers cannot afford repayments at these levels then it is doubtful that they should be borrowing at all. Cash rates are at historic lows at present but will eventually rise over the next few years as domestic and global economies recover.
      • Low interest rates, combined with a weaker Aussie dollar, are acting to support growth in the economy. It is up to businesses and consumers to respond to the attractive settings. But it all gets down to confidence. We wouldn’t expect the economy to lift markedly until the Federal Election has been run and won.
      • Savers need to apply more thought about where they put their savings. That is a key message from the Reserve Bank Governor. Encouragingly the Reserve Bank Governor is not concerned about an “asset bubble” – unsustainable growth of property prices. Simply, attitudes towards debt are far different than in the past with consumers and businesses far more conservative.
      • This is the first rate cut in an election period. But just like the last election period when rates were increased, the rate move was well flagged, supported by all economists and justifiable.
      • The statement from the July meeting is on the right; the statement from today’s August 2013 meeting is on the left. Emphasis has been added to significant changes in wording in the recent statement.

Interest rate decision and past cycles

  • The Reserve Bank Board has cut the cash rate by 25 basis points to 2.50 per cent. The previous rate cuts were in May 2013 (25 basis points), December 2012 (25 basis points), October 2012 (25 basis points), June 2012 (25 basis points), May 2012 (50 basis points) and November and December 2011 (each by 25 basis points). Prior to those moves the Reserve Bank had previously lifted rates seven times from October 2009 to November 2010 – a total of 1.75 percentage points, from 3.00 per cent to 4.75 per cent.
  • In the last rate-cutting cycle, the cash rate fell to a low of 3.00 per cent in April 2009. In the previous rate-cutting cycle the cash rate fell to 4.25 per cent in December 2001. In the two previous rate-cutting cycles, the cash rate fell to lows of 4.75 per cent.
  • The Reserve Bank looks more closely at the variable housing rate to gauge how close rates are to “normal”. If variable housing rates of major banks fall to 5.95 per cent, this would be below the long-term average or “normal” rate of 7.20 per cent but still above the 41-year low of 5.75 per cent recorded in April-May 2009.

What are the implications of yesterday’s decision?

  • CommSec hopes that this is the last interest rate cut in the cycle. If borrowers cannot afford repayments at these levels then it is doubtful that they should be borrowing at all. Cash rates are at historic lows at present but will eventually rise over the next few years as domestic and global economies recover.
  • Low interest rates, combined with a weaker Aussie dollar, are acting to support growth in the economy. It is up to businesses and consumers to respond to the attractive settings. But it all gets down to confidence. We wouldn’t expect the economy to lift markedly until the Federal Election has been run and won.
  • Savers need to apply more thought about where they put their savings. That is a key message from the Reserve Bank Governor. Encouragingly the Reserve Bank Governor is not concerned about an “asset bubble” – unsustainable growth of property prices. Simply, attitudes towards debt are far different than in the past with consumers and businesses far more conservative.
  • This is the first rate cut in an election period. But just like the last election period when rates were increased, the rate move was well flagged, supported by all economists and justifiable.

Comparing the two most recent statements

  • The statement from the July meeting is on the right; the statement from today’s August 2013 meeting is on the left. Emphasis has been added to significant changes in wording in the recent statement.

The post Reserve Bank ponders next move appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2013/08/reserve-bank-ponders-next-move/feed/ 0 CBA Economics: Net overseas migration continues to drive population growth https://www.adviservoice.com.au/2013/06/cba-economics-net-overseas-migration-continues-to-drive-population-growth/ https://www.adviservoice.com.au/2013/06/cba-economics-net-overseas-migration-continues-to-drive-population-growth/#respond Sun, 23 Jun 2013 21:45:22 +0000 https://adviservoice.com.au/?p=21574 Australia’s population rose by 94.1k (0.4%) over the December quarter 2012 to take the annual increase to 394.2k. The increase means that Australia’s population was just under 23 million at the end of 2012. Over the year to QIV 2012, the population growth rate was 1.8% – the highest since QIII 2009. Net migration continues to be the major contributor to population growth. It was 235.9k over 2012, the highest annual increase since 2009.

In brief:

Population Growth

Net immigration is the biggest driver of population growth. The birth rate has picked up recently.

  • Australia’s population rose by 94.1k in QIV to 22,906 million. It is a solid 394.2k, or 1.8%, higher than a year ago.
  • The natural increase (births less deaths) was 158.3k in 2012. There were 305.4k births and 147.1k deaths.
  • Net overseas migration was 235.9k in 2012.
  • Natural increase contributed 40% of the population rise over the past year and net migration contributed 60%.
  • In annual growth terms, WA continued to record the fastest population growth of all States, with an increase of 3.5%.
  • The resource rich state accounts for 10.8% of the total population.
  • Over 2012, there were 147k residential.

 

To read the full update click here.

]]> Australia’s population rose by 94.1k (0.4%) over the December quarter 2012 to take the annual increase to 394.2k. The increase means that Australia’s population was just under 23 million at the end of 2012. Over the year to QIV 2012, the population growth rate was 1.8% – the highest since QIII 2009. Net migration continues to be the major contributor to population growth. It was 235.9k over 2012, the highest annual increase since 2009.

In brief:

Population Growth

Net immigration is the biggest driver of population growth. The birth rate has picked up recently.

  • Australia’s population rose by 94.1k in QIV to 22,906 million. It is a solid 394.2k, or 1.8%, higher than a year ago.
  • The natural increase (births less deaths) was 158.3k in 2012. There were 305.4k births and 147.1k deaths.
  • Net overseas migration was 235.9k in 2012.
  • Natural increase contributed 40% of the population rise over the past year and net migration contributed 60%.
  • In annual growth terms, WA continued to record the fastest population growth of all States, with an increase of 3.5%.
  • The resource rich state accounts for 10.8% of the total population.
  • Over 2012, there were 147k residential.

 

To read the full update click here.

The post CBA Economics: Net overseas migration continues to drive population growth appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2013/06/cba-economics-net-overseas-migration-continues-to-drive-population-growth/feed/ 0 Investor snapshot: US next phase; Population up; Retail leads jobs https://www.adviservoice.com.au/2013/06/investor-snapshot-us-next-phase-population-up-retail-leads-jobs/ https://www.adviservoice.com.au/2013/06/investor-snapshot-us-next-phase-population-up-retail-leads-jobs/#respond Sun, 23 Jun 2013 21:40:02 +0000 https://adviservoice.com.au/?p=21589 In brief:

US Monetary Policy; Population; Employment by industry

  • ¾ US Monetary Policy: Federal Reserve chairman Ben Bernanke has signalled a new phase for the US economy. But bond buying (printing cash) won’t end any time soon.
  • ¾ Population: Australia’s population grew by 1.75 per cent over the year to December – the fastest rate in three years.
  • ¾ Industry employment: Employment rose by just 400 people in the three months to May after gaining 104,900 in the previous three months – the biggest quarterly gain in five years. Strongest sector in the May quarter was Retail trade (up 34,200) while Wholesale trade jobs fell by 32,000.
  • ¾ Chinese economy: The ‘flash’ Purchasing Managers index in china for June was at a 9-month low of 48.3, down from 49.2 in May.

What do the figures show?

US Monetary Policy

  • The Federal Reserve will continue to purchase debt at the rate of $85 billion a month and leave the official interest rate between zero and 0.25 per cent. But while the Fed chief Ben Bernanke hinted at an end to bond buying, he noted: “If you draw the conclusion that I’ve just said that our purchases will end in the middle of next year, you’ve drawn the wrong conclusion, because our purchases are tied to what happens in the economy.”

Demographic Statistics

Employment to May 2013

Employment to May 2013

  • Australia’s population grew by 1.75 per cent over the year to December – the fastest rate in three years. Australia’s population stood at 22,906,352 people at the end of December, but six months later the figure is most likely around 23.1 million.
  • A record 305,400 babies were born over 2012, up 2.2 per cent over the year but deaths barely moved over the year to 147,000. Overseas migration totalled 235,900 in the 2012 calendar year, the biggest annual total in three years, but below the record high of 315,700 in the year to December 2008.
  • Across the states and territories, fastest annual population growth occurred in Western Australia (3.47 per cent – fastest on record), followed by ACT (2.30 per cent), Queensland (2.05 per cent), Northern Territory (1.79 per cent), Victoria (1.78 per cent), NSW (1.25 per cent), South Australia (0.95 per cent) and Tasmania (0.08 per cent).

Employment by Industry

  • Employment rose in 9 of the 19 industry sectors in the three months to May. Employment fell most in Wholesale Trade (down 32,000) after rising by 39,300 in the previous quarter. Next biggest fall was by Construction (down 20,300) followed by Transport, Postal and Warehousing (down 19,800). Biggest gain in
    Record Population WA May 2013

    Record Population WA May 2013

    jobs occurred in Retail Trade (up 34,200) followed by Public Administration and Safety (up 14,000) and Arts and Recreation Services (up 13,700).

  • Healthcare remains the biggest employer with 1.40 million employees (12.1 per cent of the total) followed by Retail Trade (10.8 per cent) and Construction (8.6 per cent).

What is the importance of the economic data?

  • Demographic Statistics are issued by the Bureau of Statistics each quarter. The figures include estimates of births, deaths, in-bound and out-bound migration movements and estimates of population change by State.
  • The Australian Bureau of Statistics (ABS) provides detailed labour market figures
    Population data May 2013

    Revised population data May 2013

    one week after releasing ‘top level’ statistics of employment & unemployment levels across states and territories. The detailed data is useful in identifying broader underlying trends and instructive about the health of the economy.

What does it all mean?

  • Financial markets have over-reacted to the latest Fed decision. Rather than celebrating the fact that the US economy is starting to stand on its own two feet, investors are fretting about the end to cheap cash. The Dow Jones fell 206 points and the Aussie slumped against a stronger greenback to US93 cents.
  • This is very much a knee-jerk reaction. The good news outweighs the bad.
    Baby boom May 2013

    Baby boom May 2013

    And all the US economic problems haven’t been solved overnight. We are still tipping the Aussie dollar at US95c at end year and All Ordinaries at 5,200 points.

  • Investors are also over-reacting to the Chinese PMI. The so-called ‘flash’ manufacturing gauge doesn’t line up well to the ‘official’ gauge of manufacturing activity. But if the Chinese economy requires stimulus, authorities are well placed to provide it with inflation controlled.
  • Provided state and local governments respond to solid population growth then it represents good momentum for economies. That is happening. Businesses are in business because they want to grow and solid population growth assists in that growth.
  • The job market is effectively flat-lining until the election is out of the way. The lift in retail jobs is clearly a big surprise.
]]> In brief:

US Monetary Policy; Population; Employment by industry

  • ¾ US Monetary Policy: Federal Reserve chairman Ben Bernanke has signalled a new phase for the US economy. But bond buying (printing cash) won’t end any time soon.
  • ¾ Population: Australia’s population grew by 1.75 per cent over the year to December – the fastest rate in three years.
  • ¾ Industry employment: Employment rose by just 400 people in the three months to May after gaining 104,900 in the previous three months – the biggest quarterly gain in five years. Strongest sector in the May quarter was Retail trade (up 34,200) while Wholesale trade jobs fell by 32,000.
  • ¾ Chinese economy: The ‘flash’ Purchasing Managers index in china for June was at a 9-month low of 48.3, down from 49.2 in May.

What do the figures show?

US Monetary Policy

  • The Federal Reserve will continue to purchase debt at the rate of $85 billion a month and leave the official interest rate between zero and 0.25 per cent. But while the Fed chief Ben Bernanke hinted at an end to bond buying, he noted: “If you draw the conclusion that I’ve just said that our purchases will end in the middle of next year, you’ve drawn the wrong conclusion, because our purchases are tied to what happens in the economy.”

Demographic Statistics

Employment to May 2013

Employment to May 2013

  • Australia’s population grew by 1.75 per cent over the year to December – the fastest rate in three years. Australia’s population stood at 22,906,352 people at the end of December, but six months later the figure is most likely around 23.1 million.
  • A record 305,400 babies were born over 2012, up 2.2 per cent over the year but deaths barely moved over the year to 147,000. Overseas migration totalled 235,900 in the 2012 calendar year, the biggest annual total in three years, but below the record high of 315,700 in the year to December 2008.
  • Across the states and territories, fastest annual population growth occurred in Western Australia (3.47 per cent – fastest on record), followed by ACT (2.30 per cent), Queensland (2.05 per cent), Northern Territory (1.79 per cent), Victoria (1.78 per cent), NSW (1.25 per cent), South Australia (0.95 per cent) and Tasmania (0.08 per cent).

Employment by Industry

  • Employment rose in 9 of the 19 industry sectors in the three months to May. Employment fell most in Wholesale Trade (down 32,000) after rising by 39,300 in the previous quarter. Next biggest fall was by Construction (down 20,300) followed by Transport, Postal and Warehousing (down 19,800). Biggest gain in
    Record Population WA May 2013

    Record Population WA May 2013

    jobs occurred in Retail Trade (up 34,200) followed by Public Administration and Safety (up 14,000) and Arts and Recreation Services (up 13,700).

  • Healthcare remains the biggest employer with 1.40 million employees (12.1 per cent of the total) followed by Retail Trade (10.8 per cent) and Construction (8.6 per cent).

What is the importance of the economic data?

  • Demographic Statistics are issued by the Bureau of Statistics each quarter. The figures include estimates of births, deaths, in-bound and out-bound migration movements and estimates of population change by State.
  • The Australian Bureau of Statistics (ABS) provides detailed labour market figures
    Population data May 2013

    Revised population data May 2013

    one week after releasing ‘top level’ statistics of employment & unemployment levels across states and territories. The detailed data is useful in identifying broader underlying trends and instructive about the health of the economy.

What does it all mean?

  • Financial markets have over-reacted to the latest Fed decision. Rather than celebrating the fact that the US economy is starting to stand on its own two feet, investors are fretting about the end to cheap cash. The Dow Jones fell 206 points and the Aussie slumped against a stronger greenback to US93 cents.
  • This is very much a knee-jerk reaction. The good news outweighs the bad.
    Baby boom May 2013

    Baby boom May 2013

    And all the US economic problems haven’t been solved overnight. We are still tipping the Aussie dollar at US95c at end year and All Ordinaries at 5,200 points.

  • Investors are also over-reacting to the Chinese PMI. The so-called ‘flash’ manufacturing gauge doesn’t line up well to the ‘official’ gauge of manufacturing activity. But if the Chinese economy requires stimulus, authorities are well placed to provide it with inflation controlled.
  • Provided state and local governments respond to solid population growth then it represents good momentum for economies. That is happening. Businesses are in business because they want to grow and solid population growth assists in that growth.
  • The job market is effectively flat-lining until the election is out of the way. The lift in retail jobs is clearly a big surprise.

The post Investor snapshot: US next phase; Population up; Retail leads jobs appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2013/06/investor-snapshot-us-next-phase-population-up-retail-leads-jobs/feed/ 0 Strongest lift in spending in six years https://www.adviservoice.com.au/2013/06/strongest-lift-in-spending-in-six-years/ https://www.adviservoice.com.au/2013/06/strongest-lift-in-spending-in-six-years/#respond Thu, 20 Jun 2013 21:55:37 +0000 https://adviservoice.com.au/?p=21534
  • Economy-wide spending has posted its strongest three-month period of growth in six years. According to the Commonwealth Bank Business Sales Indicator (BSI), spending rose by 1.0 per cent in May after a 1.2 per cent increase in April and 1.1 per cent gain in March. It was the biggest three-month lift in spending since the March-May period of 2007.
  • The seasonally adjusted estimate of spending rose by 5.2 per cent in May, the strongest gain in over five years (since April 2008). The lift in the BSI in May follows a 0.1 per cent fall in April and a 1.3 per cent gain in March. Annual growth now stands at 10.3 per cent, up from 5.9 per cent in April and equalling the growth rate recorded in June 2012.
  • The seasonally adjusted and trend estimates of the BSI results are derived via the SEASABS statistical program from the Australian Bureau of Statistics.
  • At a sectoral level, seven of the 20 industry sectors contracted in trend terms in May, up from five sectors in both March and April. But none of the eight states and territories recorded weaker sales in trend terms in May – a situation that has now prevailed for eight months.
  • The Commonwealth BSI is obtained by tracking the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities. The BSI covers spending broadly across the economy rather than just retail sales, including spending on automobiles, personal services and airlines.

    • What does it all mean?

    • Aussie consumers and businesses are spending a little bit more freely. According to the latest Commonwealth Bank Business Sales Indicator (BSI), economy-wide spending grew by 1 per cent in trend terms in May, after a 1.2 per cent lift in April and a 1.1 per cent gain in March.
    • Retailers have reason to be more confident, and despite the recent fall in the Aussie dollar it is still a case of keeping prices lower to attract customers and prevent them flocking to overseas web sites.
    • The Reserve Bank is unlikely to shift its rhetoric in the near future. The economy is improving of a low base, however the recovery is still fragile. An ongoing improvement in confidence is necessary to support activity levels, and the perception of lower interest rates will certainly support sentiment.

    What do the figures show?

    • The recovery in economy-wide spending is consolidating. According to the latest Commonwealth Bank Business Economy-wide spending is now recording firm growth, in marked contrast to the weakness exhibited from May to September last year. According to the latest Commonwealth Bank Business Sales Indicator (BSI), economy-wide spending grew by 1.0 per cent in trend terms in May, the ninth constructive monthly increase in spending. Over that past three months sales have lifted on average by 1.1 per cent a month – the strongest growth in six years.
    • The seasonally-adjusted measure of sales leapt by 5.2 per cent in May – the strongest increase in five years. The BSI had previously eased by 0.1 per cent in April after lifting by 1.3 per cent in March. Annual growth in spending now stands at 10.3 per cent in seasonally adjusted terms, up from 5.9 per cent in April.
    • The Commonwealth BSI is obtained by tracking the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities. And in line with the practice of the Bureau of Statistics with its retail trade data, seasonally adjusted and trend estimates of the BSI are obtained by applying statistical software. The seasonally adjusted and trend BSI results are derived from the same SEASABS statistical software. This allows analysis of the broader underlying trends that may be hidden in the raw data.
    • Across sectors, seven of the industry sectors fell in trend terms in May but declines were fairly modest. Amongst the weakest sectors in May were Mail Orders & Telephone Order Providers (down 1.6 per cent) with Automobiles & Vehicles, Business Services and Hotels & Motels all losing 0.6-0.7 per cent.
    • In contrast the large Retail Stores sector (31.5 per cent of the BSI) rose by 2.3 per cent in May with both Utilities and Wholesale Distributors & Manufactures up 1.4 per cent.
    • In annual terms in May, the BSI was up 7.4 per cent on a year ago – the best growth since December 2007. Six of the 20 industry sectors contracted in May, up from five sectors in April and four sectors in March. Spending in Business Services fell for the third straight month, down 6.2 per cent and the biggest fall in around 5½ years. And sales at Mail Orders & Telephone Order Providers fell at a 28.1 per cent annual pace in May after rising at an annual rate of around 20 per cent between March-June 2012.
    • Strongest growth was recorded by the large Retail Stores sector, up 12.9 per cent on a year ago, while the Wholesale Distributors & Manufactures sector was up 11.0 per cent, followed by Utilities, up 9.2 per cent, Government services, up 8.6 per cent.
    • None of the states and territories recorded weaker sales in trend terms in May. Sales rose most in NSW (up 1.9 per cent), followed by the ACT (up 1.5 per cent), South Australia (up 1.0 per cent), Queensland (up 0.6 per cent), Western Australia (up 0.3 per cent), Northern Territory and Victoria (up 0.2 per cent) and Tasmania (flat).
    • The trend BSI has now risen for two years in the Northern Territory, for 23 straight months in both Queensland and South Australia, for 20 straight months in ACT and for 14 straight months in Tasmania.
    • In annual terms, no state or territory had sales below a year ago. Strongest growth was posted in ACT (up 13.3 per cent), followed by South Australia (up 12.2 per cent), NSW (up 8.8 per cent), and Queensland (up 7.5 per cent).

    What are the implications for interest rates and investors?

    • Consumer spending is expanding at a reasonably constant rate across the country. Overall the economy remains patchy at present and policymakers will want more consistent readings on the economy before deciding on any shifts in monetary policy. CommSec expects the next rate cut to take place in August.
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  • Economy-wide spending has posted its strongest three-month period of growth in six years. According to the Commonwealth Bank Business Sales Indicator (BSI), spending rose by 1.0 per cent in May after a 1.2 per cent increase in April and 1.1 per cent gain in March. It was the biggest three-month lift in spending since the March-May period of 2007.
  • The seasonally adjusted estimate of spending rose by 5.2 per cent in May, the strongest gain in over five years (since April 2008). The lift in the BSI in May follows a 0.1 per cent fall in April and a 1.3 per cent gain in March. Annual growth now stands at 10.3 per cent, up from 5.9 per cent in April and equalling the growth rate recorded in June 2012.
  • The seasonally adjusted and trend estimates of the BSI results are derived via the SEASABS statistical program from the Australian Bureau of Statistics.
  • At a sectoral level, seven of the 20 industry sectors contracted in trend terms in May, up from five sectors in both March and April. But none of the eight states and territories recorded weaker sales in trend terms in May – a situation that has now prevailed for eight months.
  • The Commonwealth BSI is obtained by tracking the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities. The BSI covers spending broadly across the economy rather than just retail sales, including spending on automobiles, personal services and airlines.

    • What does it all mean?

    • Aussie consumers and businesses are spending a little bit more freely. According to the latest Commonwealth Bank Business Sales Indicator (BSI), economy-wide spending grew by 1 per cent in trend terms in May, after a 1.2 per cent lift in April and a 1.1 per cent gain in March.
    • Retailers have reason to be more confident, and despite the recent fall in the Aussie dollar it is still a case of keeping prices lower to attract customers and prevent them flocking to overseas web sites.
    • The Reserve Bank is unlikely to shift its rhetoric in the near future. The economy is improving of a low base, however the recovery is still fragile. An ongoing improvement in confidence is necessary to support activity levels, and the perception of lower interest rates will certainly support sentiment.

    What do the figures show?

    • The recovery in economy-wide spending is consolidating. According to the latest Commonwealth Bank Business Economy-wide spending is now recording firm growth, in marked contrast to the weakness exhibited from May to September last year. According to the latest Commonwealth Bank Business Sales Indicator (BSI), economy-wide spending grew by 1.0 per cent in trend terms in May, the ninth constructive monthly increase in spending. Over that past three months sales have lifted on average by 1.1 per cent a month – the strongest growth in six years.
    • The seasonally-adjusted measure of sales leapt by 5.2 per cent in May – the strongest increase in five years. The BSI had previously eased by 0.1 per cent in April after lifting by 1.3 per cent in March. Annual growth in spending now stands at 10.3 per cent in seasonally adjusted terms, up from 5.9 per cent in April.
    • The Commonwealth BSI is obtained by tracking the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities. And in line with the practice of the Bureau of Statistics with its retail trade data, seasonally adjusted and trend estimates of the BSI are obtained by applying statistical software. The seasonally adjusted and trend BSI results are derived from the same SEASABS statistical software. This allows analysis of the broader underlying trends that may be hidden in the raw data.
    • Across sectors, seven of the industry sectors fell in trend terms in May but declines were fairly modest. Amongst the weakest sectors in May were Mail Orders & Telephone Order Providers (down 1.6 per cent) with Automobiles & Vehicles, Business Services and Hotels & Motels all losing 0.6-0.7 per cent.
    • In contrast the large Retail Stores sector (31.5 per cent of the BSI) rose by 2.3 per cent in May with both Utilities and Wholesale Distributors & Manufactures up 1.4 per cent.
    • In annual terms in May, the BSI was up 7.4 per cent on a year ago – the best growth since December 2007. Six of the 20 industry sectors contracted in May, up from five sectors in April and four sectors in March. Spending in Business Services fell for the third straight month, down 6.2 per cent and the biggest fall in around 5½ years. And sales at Mail Orders & Telephone Order Providers fell at a 28.1 per cent annual pace in May after rising at an annual rate of around 20 per cent between March-June 2012.
    • Strongest growth was recorded by the large Retail Stores sector, up 12.9 per cent on a year ago, while the Wholesale Distributors & Manufactures sector was up 11.0 per cent, followed by Utilities, up 9.2 per cent, Government services, up 8.6 per cent.
    • None of the states and territories recorded weaker sales in trend terms in May. Sales rose most in NSW (up 1.9 per cent), followed by the ACT (up 1.5 per cent), South Australia (up 1.0 per cent), Queensland (up 0.6 per cent), Western Australia (up 0.3 per cent), Northern Territory and Victoria (up 0.2 per cent) and Tasmania (flat).
    • The trend BSI has now risen for two years in the Northern Territory, for 23 straight months in both Queensland and South Australia, for 20 straight months in ACT and for 14 straight months in Tasmania.
    • In annual terms, no state or territory had sales below a year ago. Strongest growth was posted in ACT (up 13.3 per cent), followed by South Australia (up 12.2 per cent), NSW (up 8.8 per cent), and Queensland (up 7.5 per cent).

    What are the implications for interest rates and investors?

    • Consumer spending is expanding at a reasonably constant rate across the country. Overall the economy remains patchy at present and policymakers will want more consistent readings on the economy before deciding on any shifts in monetary policy. CommSec expects the next rate cut to take place in August.

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