Yesterday, new data showed house prices and retail sales were accelerating and the long-run decline in job advertisements was coming to an end, leaving almost zero chance of an interest rate cut at the Reserve Bank board meeting today.
A solid rise in department store, clothing and footwear sales across all states except Western Australia helped lift national retail spending by 0.8 per cent in September to $22.15 billion, twice as quickly as economists had expected and the biggest monthly rise since February.
Joe Hockey said the result reflected “the responsible, careful and methodical approach of the Coalition”.
“Quarterly retail trade volumes were up 0.7 per cent in the September quarter, to be 2.2 per cent higher over the year,” the Treasurer said. “Again, this was above expectations of a rise of 0.2 per cent.”
Commonwealth Bank senior economist Michael Workman said the Coalition’s clear win at the September 7 election would be seen as “positive for consumer confidence and retail spending”.
Talk of a housing bubble also enjoyed a shot in the arm yesterday, as new data from the Australian Bureau of Statistics showed Sydney house prices rose 3.6 per cent over the three months to September 30, while house and apartment prices in the eight capital cities were 7.6 per cent above their level a year earlier.
Barclay’s chief economist Kieran Davies said: “Lower interest rates are providing a clear stimulus to both housing activity and house prices, and we think the RBA would be pleased that retail sales are showing signs of life after stagnating for most of this year.’
Barring a surprise rise in unemployment, most economists believe the bank’s cutting cycle is over and it will probably lift the official cash rate from its 2.5 per cent record low next year.
ANZ’s monthly jobs survey found the total number of advertisements online and in newspapers fell slightly to 126,720 last month, reversing a small rise in September.
The bank’s chief Australian economist, Ivan Colhoun, said the decline in job advertisements appeared to be flattening out.
“While conditions in the labour market remain quite soft, there are now signs emerging that much of the deterioration in the unemployment rate has already occurred,” he said.
The economic data emerged as Richard Fisher, the president of the US Federal Reserve Bank of Dallas, slammed US government policy in a speech in Sydney.
He argued its fiscal policy had hamstrung the Fed’s attempts to stimulate the US economy.
Original article published at www.news.com.au by AAP 5/11/2013