Wages, job data in focus for clues on economy, rates
Fresh wages growth and job market numbers due this week will inform the outlook for the economy and interest rates, amid expectations monetary policy will remain on hold until at least early 2025.
After the Reserve Bank of Australia hosed down the chance of a near-term interest rate cut at its August meeting, attention is turning to any new data that might confirm the economy is tracking in line with the central bank’s expectations.
The June quarter wage price index – which indicates the pace of underlying inflation pressures in the labour market – due on Tuesday from the Australian Bureau of Statistics is tipped to show a moderation in pay packets in 2023/24.
After rising strongly in the past few years, wage growth has recently started to fall in line with a subdued economy and a gradual weakening in demand for labour.
Financial market economists expect a further softening in the year to the end of June, with ANZ pointing to a rise of four per cent, down from 4.1 per cent in the March quarter.
The central bank’s outlook for wages was downgraded in its August economic update to an annualised forecast of 3.6 per cent in the December quarter, from four per cent in the June quarter.
New information on conditions and confidence levels in the private sector are also due on Tuesday when National Australia Bank releases its business survey for July.
An update on consumer confidence is due the same day, when the Westpac-Melbourne Institute monthly survey is released.
And Thursday’s official labour force figures for July could show the jobless rate ticking higher again, to 4.2 per cent from 4.1 per cent, according to economists.
A modest 20,000 jobs are likely to have been added to the economy, following a rise of 50,000 in June.
As well, Reserve Bank deputy governor Andrew Hauser will deliver a lunch-time speech in Brisbane on Monday which will be scanned for more clues to the economic outlook.
Then on Friday, Mr Hauser will join governor Michele Bullock when she appears before the House economic committee in federal parliament in Canberra.
Meanwhile, the Australian stock exchange should get off to a positive start on Monday after Wall Street edged higher on Friday.
The US Dow Jones Industrial Average rose 51.05 points, or 0.13 per cent, to 39,497.54, the S&P 500 gained 24.85 points, or 0.47 per cent, to 5,344.16 and the Nasdaq Composite added 85.28 points, or 0.51 per cent, to 16,745.30.
The Australian futures market is pointing to a 59 point lift in the benchmark S&P/ASX200 index to 7781 points when trading resumes.
On Friday, the local bourse finished up 95.7 points, or 1.25 per cent, to 7,777.7 while the broader All Ordinaries gained 104.2 points, or 1.32 per cent, to 7,990.7.
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