Economics

Bad news or a one-off reaction to signs of movement in the trade war with Donald Trump’s America? We won’t know for several months, but China’s trade performance in December knocked markets across Asia on Monday.

China’s December and 2018 trade figures showed higher imports of oil, LNG, and coal, steady levels of iron ore shipments and lower levels for soybeans and copper.

Perhaps the best data so far on the extent of the slowdown in domestic demand in China from the car sales data for the country for December and 2018 which showed the first drop in total vehicle sales for 29 years.

The Chinese government has bowed to the inevitable and has set a lower economic growth target for 2019 of 6% to 6.5%.

For Australia, the latest data out of China is both worrying and sort of reassuring.

November’s unemployment data showed all the hallmarks of an end of year set of data – a fall in full-time work as companies adjust their workforces towards the end of the year (such as TV) and a big jump in part-time work as retailers and suppliers and distributors for the great Christmas – New year sales rush boost employment.

Relaxed, but alert? That’s one way of describing the attitude of the nation’s supreme council of financial regulators to the home price crunch and the tighter lending activity.

Australian business conditions and confidence are clearly cooling, judging by the November NAB business survey as the softening that started midyear continued last month.

Retail sales rose a sedate 0.3% in October, as online spending hit a record high and spending rose on clothing and footwear but fell in cafes, restaurants, and takeaway food services.

There’s a possibility that the September quarter GDP, to be reported in the national accounts for the quarter out later this morning, could be better than expected.

Mixed economic news yesterday ahead of the last Reserve Bank board meeting for the year later today.

Donald Trump, the US president, has agreed to hold off on imposing higher tariffs on Chinese imports next year, after reaching a deal with Xi Jinping, China’s president, to slow the trade war afflicting both countries and rattling financial markets.

Australian companies, especially those outside the resources sector, have again lifted spending plans for the coming financial year.

The Reserve Bank of NZ has taken its foot off the throat of the country’s home mortgage sector with the news that it will ease some prudential controls from January 1 next year.

More confusing signals from the Chinese economy that leave us none the wiser about its real state of health.

Wage rises were again slow, low and infrequent for millions of Australian workers in the three months to September as the 3.5% boost in the National Wage from July 1 saw the Wage Price Index rise the expected 0.6% in the quarter for an unconvincing annual rise of 2.3%.

The Reserve Bank won’t find any hidden surprises in the latest business survey from the National Australia Bank, nor will anyone else.

Far from being impacted by the trade war with Donald Trump’s US administration, China has reported better-than-expected exports and imports for October.

The Reserve Bank of Australia opted to keep interest rates on hold at 1.5% at its second last meeting of the year yesterday and there won’t be a change until well into 2020, even though the central bank lifted its growth forecasts for the economy noticeably.

Figures out yesterday showed more weakness in car sales, especially to private buyers in October, while job ads edged a touch higher last month after a couple of months of weakening activity.

As warned by the Reserve Bank earlier in the year, the September quarter Consumer Price Index came in low because of smaller than forecast rises in government charges, such as childcare costs, housing, and rent costs and electricity prices and despite a jump in fuel costs.