Economics

Bushfire damage and coronavirus are now big factors for the RBA tomorrow. Then there’s the December quarter GDP figures in the national accounts on Wednesday, plus the start of month data on retail sales, building approvals, house prices, trade, and car sales.

On top of the injection of billions of yuan in liquidity into money markets that have supported both share and bond markets, China’s central bank has now cut key interest rates to try and support the economy hit by the COVID-19 virus.

As forecast by the Reserve Bank earlier this month, wage growth remained sluggish in the December quarter, rising by just 0.5% or an annual 2.2% thanks to a fall in growth in public service pay.

The NAB January business survey revealed that the proportion of Australian businesses planning to boost hiring levels fell sharply last month, suggesting sluggish economic growth may see employment growth slow in the months ahead.

As expected the high price of pork again kept China’s Consumer Price Inflation well above 5% as consumers chased supplies of the meat for the Lunar New Year festival and ahead of the sudden worsening in the coronavirus crisis.

The uncertainty in the national labour market was again underlined by the December data issued by the ABS which showed a surprise dip in the jobless rate to a nine-month low of 5.1% from 5.2% in November and 5.3% in October.

China’s economic growth slowed to the weakest pace since 1990 in 2019.

For all the talk of the damage the US trade war would do to Chinese exports, the impact, while very noticeable, wasn’t as dramatic as many analysts had claimed.

As forecast last week, the New Zealand government has cut its 2019-29, confirmed a smaller budget deficit (and trimmed future surplus forecasts) and revealed plans for a stimulus package involving more than $NZ12 billion of infrastructure spending.

Producer price inflation remained negative in China last month for the fifth month in a row but the country’s China’s consumer inflation accelerated further in November to its highest level in nearly eight years, thanks to soaring prices of pork.

Nothing positive from the latest National Australia Bank monthly survey of business activity and confidence going into the last month of 2019 and into early 2020.

Four days after the Japanese government revealed plans for a $US121 billion stimulus spending package, data emerged on Monday showing that the economy is traveling a lot better than anyone had thought.

Another 1% plus fall in China’s exports in November but imports surprised with a rise of 0.3% after a sharp fall in October.

After the very strong US jobs report for November, don’t expect any move on interest rates at this week’s final meeting for 2019 of the US Fed’s Reserve’s top policy committee.

If the September quarter’s 0.4% rise in GDP is a ‘gentle turning point’ as suggested by the Reserve Bank and governor Philip Lowe, then the economy got lost somewhere in the three months to September 30.

Yesterday the Australian Bureau of Statistics confirmed that forecast in the releasing the current account data for the September quarter showing a surplus for the three months of $7.9 billion.

No rate cut today at the final Reserve bank board meeting, despite weak data yesterday – except for house prices which continue to escalate towards what will be a crunch.

Australian business investment fell unexpectedly in the September quarter, creating additional downside risks for next week’s third-quarter national accounts and GDP figures.

A burst of reality on wages over the next year from the second most senior official at the Reserve Bank with Deputy Governor, Guy Debelle telling a conference in Canberra that Australia had to get used to low wage rises for some time to come.