No change in the economy’s current sluggish pace, judging by yesterday’s data.
Headline inflation remains reasonably high, driven by the rain and flood damage to vegetables and fruit, business credit is subdued, business stocks rose in the three months to December, corporate profits fell slightly and wages and salaries were up a touch.
Nothing will influence the Reserve Bank at its board meeting today.
The forecast for tomorrow’s 4th quarter GDP estimates from the Australian Bureau of Statistics remain around the 0.3% to 0.7% level, based on the inventory and other business indicators from the ABS yesterday.
AAP said yesterday a survey of economists had come up with a 0.6% estimate for GDP.
The Bureau said inventories rose 0.7% in seasonally adjusted terms in the December quarter, manufacturing sale of goods and services were up an estimated 0.8%, seasonally adjusted, while wholesalers’ sales of goods and services were up by the same amount.
The ABS said the seasonally adjusted estimate for company gross operating profits fell 2.8% in the December quarter 2010 and the seasonally adjusted estimate for wages and salaries rose 1.5% in the December quarter 2010.
So not much drama with economists not that surprised by the rise in inventories (the market had been looking for a rise of 0.5% anyway). Given the lacklustre retailing sales figures in the quarter and especially in December, a rise in stocks was expected.
Economists suggested that compared to the sluggish 0.2% rise in GDP in the September quarter (annual rate of 2.7%) and the 0.2% fall in non farm growth, the December quarter will probably be a bit better.
We get current account and government finance figures today, both of which play a big role in the final growth figures.
The private credit figures for January from the RBA yesterday won’t scare anyone, especially the bank’s board meeting this morning to look at interest rates.
The RBA said private credit rose 0.3% in January from December when it was up 0.2%.
Over the year to January, total credit rose by 3.3%, down from the 3.4% rate in 2010.
Housing credit was steady, up 0.6% in January, the same as December. Over the year to January, housing credit rose by 7.3%, steady on the annual rate for the year to December.
Owner occupied housing loans were about steady, those for investors slightly higher.
Other personal credit was flat over January, after falling by 0.4% in December.
Over the year to January, other personal credit was up 0.9%, against 1.2% in the year to December.
Business credit fell by 0.1% in January, against a 0.2% drop in December.
Over the year to January, business credit declined by 2.4%, up from the 2.3% fall in all of 2010.
Meanwhile the monthly inflation report from TD Securities and the Melbourne Institute showed a rise of 0.2% last month, down from 0.4% in February.
That left an annual rate of 3.6% for the year to February, up from 3.4% in the year to January.
House prices seem to have fallen in January, with the wet weather and floods in Queensland and Victoria blamed, as we would have expected.
RPData Rismark said that city home values fell 1.6% in January, after rising 0.2% in December. Outside the cities they fell 1.2%.
Home prices in Brisbane dropped 2.3% in the three months to January, while they fell 1.9% in Melbourne over that period.
Prices fell 3.8% in Canberra, 1.4% in Sydney, 1.3% in Adelaide and 2.6% in Perth. Hobart bucked the trend, rising 0.6% in the three months.
RP Data’s research director, Tim Lawless said in a statement:
"The volume of sale transactions in January is normally much lower than other months due to the seasonality of the market.
"This year the downturn in activity has been compounded by the spate of natural disasters experienced around the country."
