Economics

Another big week for business, economies and investors/consumers, with plenty of data coming out, led by the latest local jobs figures and some key US economic data.

Data issued on Friday by the Chinese National Bureau of Statistics revealed the Consumer Price Index rose 0.4% in March compared to a fall of 0.2% in February.

The US is booming, or getting close to one. The IMF says so, the Fed thinks so and now Jamie Dimon, CEO of JPMorgan Chase and America’s senior banker agrees.

According to the IMF, the global economy will be powering out of 2020 thanks to the rapid rise in vaccinations in the US and the near $US2 trillion Biden stimulus program.

As expected the Reserve Bank has left the official cash rate unchanged at 0.1% and again emphasised that it is prepared to wait until it sees stronger wages and inflation.

The US economy is booming and will get boomier as vaccinations build, confidence grows and the Biden stimulus really kicks in from this month and through June.

ABS housing data on Wednesday revealed a surprise surge in both private and non-private dwelling approvals, thanks in part to the federal government’s first home buyers’ assistance package.

Activity in China’s huge factory and services sector grew faster than forecast in March from February when it was slowed by the annual Lunar New Year holiday.

February was a record month for Australia’s trade account, with the $8.1 billion figure marking the first time the country has seen three months in a row of $8 billion-plus goods surpluses.

New Zealand’s economic growth for the fourth quarter contracted 1% – a worse outcome than the flat result that was forecast by the country’s central bank and many in the markets.

The unemployment rate dropped to a better than expected 5.8% in February from 6.4% at the start of the year after 89,000 new jobs were created in the month.

Detailed production data for January and February (combined) – especially that for crude steel – adds to questions about whether China’s current economic rebound is slowing.

Despite the underlying strength of the latest round of Chinese economic data, it’s important to keep in mind it is being compared year-on-year, when Covid lockdowns were first being introduced.

While the Fed isn’t expected to make any changes to monetary policy at this week’s two-day meeting, Chairman Jay Powell’s comments and the latest economic forecasts will hit markets one way or another.

More signs the Chinese economic rebound remains in place, with producer prices up, consumer prices down, and passenger car sales rebounding to top the levels of a year earlier.

In his speech in Sydney on Wednesday, RBA Governor Philip Lowe shifted the focus in the central bank’s thinking over the next few years to wages and full employment. 

Japan’s economy might have expanded more slowly than first reported in February, but the size of the change was of little consequence.

Break out the bubbly! The economy is at its boomiest and business confidence is, well, very confident indeed, according to the latest business survey from the National Australia Bank.

China’s exports jumped 60.6% in January-February from a year earlier and imports were up 22.2%, faster than expected from depressed levels at the start of 2020.

Final data for January trade and retail sales confirmed the solid first estimates issued last month, with the trade surplus jumping to its highest ever level.

Dairy prices rose by a massive 15% in the latest Global Dairy Trade auction, driven by demand for whole milk powder and butter before the season comes to an end.

Australia enjoyed stronger than expected economic growth for a second successive quarter in the three months to December, according to the ABS.

The December quarter national accounts are out later today and will likely show growth of around 2.4% to 2.6% quarter on quarter but GDP at the end of 2020 still down around 1.8% over the year.

The Reserve bank of NZ has held its key interest rate steady and left other support measures unchanged after its latest monetary policy meeting at which it appears to have backed off moves to take rates negative.

Despite a drop in iron ore, meat and coal exports, Australia’s trade performance started 2021 strongly with a merchandise surplus of $8.754 billion in January, little changed from the $8.956 billion in December.

Normal service has been restored in the economy, judging by the January labour force figures from the Australian Bureau of Statistics which showed another fall in the unemployment rate.

Growth in the UK economy slumped by record 9.9% in 2020, the biggest annual crash in output in more than 300 years.

For several months now American financial markets – well the more panicky and younger types – have been wetting themselves about inflation. The Fed, as it turns out, not so much.