The Reserve Bank board will find one or two points of interest from yesterday’s data releases at its first meeting today, but it won’t change the policy stance of no move in rates for the time being.
Contrary to market expectations for a small rise, housing approvals fell by a steep 4.1% in December 2018, in trend terms, according to the Australian Bureau of Statistics (ABS).
The ABS said that was the lowest level since June 2013 and was driven by another fall in approvals of apartments, units etc.
Private houses were down 1.1% quarter on quarter in trend terms.
Total dwelling approvals in 2018 fell by more than 24% in trend terms thanks to a 41.2% slump in approvals of apartments etc and a 9.2% drop in new private home approvals.
In seasonally adjusted terms, total dwellings fell by 8.4% in December, driven by an 18.8% slump in private dwellings excluding houses and a 2.2% drop in approvals for new private houses.
In the year to December, seasonally adjusted approvals fell by more than 22% thanks to a 38% drop in approvals of apartments and home units and an 11% plus drop in new private dwellings.
The ABS said that “dwelling approvals fell in December in the Australian Capital Territory (21.3 percent), Queensland (6.5 percent), New South Wales (5.0 percent), Western Australia (3.8 percent), South Australia (1.5 percent) and Victoria (1.4 percent) in trend terms. The Northern Territory (1.7 percent) and Tasmania (1.1 percent) recorded increases.”
“Approvals for private sector houses fell in Queensland (3.6 percent), New South Wales (1.6 percent) and Western Australia (0.6 percent) declined, while increases were recorded in South Australia (0.6 percent) and Victoria (0.2 percent).
And the ANZ Job Ads index fell 1.7% in January compared to December and were 3.7% below the January 2018 level.
This is the first annual decline since April 2015. In trend terms, job ads fell by 0.5% month on month, the eighth consecutive month of trend declines. The trend declined 0.7% on a yearly basis; the first such decline since August 2014, the ANZ said.
But the ANZ series is losing its potency as a clear indicator of jobs demand in the economy – it has restricted coverage of job ad because it doesn’t fully cover online sites and company intranets.
And NAB’s chief economist Alan Oster says large online sales may be behind a 1.4 percent decline in online retail in December.
“The NAB Online Retail Sales Index recorded -1.4 percent month-on-month contraction in December,” he wrote in a release yesterday. “There has only been one other December contraction in this series – in 2016 at a much milder -0.1 percent”.
“Large online sales events such as Black Friday, Cyber Monday, and Vogue shopping night have contributed to a strong result in November and may brought forward some Christmas spending to November.
“However, given these sales have been part of the online retail environment for some time, it is likely that the weak December read partly reflects underlying weakness in the retail sector,” Mr. Oster wrote yesterday.
Retail sales and trade data for December will be released later this morning, just before the RBA decision is announced at 2.30 pm.
