Economics

More evidence of the two-faced nature of the Australian economy, with a robust trade account being offset by weak domestic conditions, particularly in housing approvals.

New Zealand currently finds itself in the grip of high inflation, low unemployment and rising interest rates because of increasing cost pressures and still-too-high house prices.

The RBA left interest rates steady and made it clear it will not be forced into lifting them by the current rise in inflation despite confirming the end of its QE campaign on Feb 10.

The Reserve Bank obviously didn’t find anything to ‘scare the horses’ in yesterday’s start of the month economic data ahead of its first monetary policy meeting for the year.

Two reports show the pace of economic activity across China slowed noticeably in January ahead of the Lunar New Year break starting tomorrow and the 2022 Winter Olympics starting Friday.

This week should see investors fully up to date on what the RBA thinks happened in the Australian economy over the holiday break and the likely path for the early months of 2022.

The US economy grew faster than forecast in the December quarter and for 2021 as a whole, but that failed to hold the attention of Wall Street investors who continued to sell.

US markets look like getting what they have demanded – a rate rise from the Federal Reserve at its March meeting.

Inflation rose more sharply than forecast as business conditions and confidence eased in December, with the latter due to the rolling impact of Covid omicron on employment.

Interest rate speculation steps up this week here and offshore, starting tomorrow with the release of Australia’s December quarter and calendar 2021 Consumer Price Inflation data.

Once again the timing of the monthly surveys for the labour force report from the ABS has prevented us from getting a clearer picture of the true state of the jobs market.

Media reaction to Tuesday’s ANZ poll showing a sharp fall in consumer confidence is one more example of how we seem to be talking ourselves into another economic slide.

The 8.1% growth in Chinese GDP for 2021 may look solid, but it cloaks the continuing slide in property investment and the weakest housing price increase in five years.

Data to be released today will confirm that, despite some strong metrics, the Chinese economy ended 2021 dragging the chain and heading into 2022 in a less than fit state.

While Covid-driven lockdowns saw the New Zealand economy shrink by a near record 3.7% September quarter, this wasn’t as bad as some had forecast.

The US Federal Reserve has made a dramatic change to its monetary policy – much more dramatic than any forecaster had predicted.

The final part of China’s November economic data dump yesterday showed another weakening in investment and retail sales but a small gain for industrial production.

An upbeat December business survey from the NAB yesterday says the economy is well placed to perhaps grow a little faster in 2022, despite the new Omicron variant of Covid.

The 2022 global economic outlook will be set this week by two events: China’s efforts to stabilise its economy and the final meeting of the US Fed for the year.

If the global trading system is still being buffeted by problems, how then have China and the US just revealed all-time monthly highs for exports and imports?

Soaring vegetable prices drove China’s consumer price inflation sharply higher in November just as producer prices showed signs of plateauing.

Chinese commodity imports were the strongest across the board for 2021, helping the country’s November trade numbers offset other domestic pressures.

Once again with a monthly report on the US labour market, the real story is to be found in the detail rather than the surprisingly weak headline new jobs figure for November.

Mixed news for the Chinese economy from the two start of month surveys of manufacturing – it’s not in good health and a diagnosis of lacklustre would be in order, judging by the data.

Australia’s economy survived the Covid Delta lockdowns in the third quarter to emerge in solid condition and looking at a rebound in the three months to December.

The emergence of the new Covid variant has made tomorrow’s September quarter economic growth data almost irrelevant, especially in the event that Omicron is as dangerous as some say.