By Craig James

Every change in season is ushered in with a barrage of economic data. So with the profit reporting season coming to an end, now it’s time for the economic data reporting season. Business investment and retail spending are the highlights in Australia in the coming week.

The week kicks off on Tuesday with the volatile Building Approvals indicator from the Australian Bureau of Statistics (ABS). The data represents the collated information of approvals by local councils to build new homes and commercial buildings.

Also on Tuesday, ANZ and Roy Morgan issue the usual weekly consumer confidence survey. Confidence levels are at three-year highs.

On Wednesday, the Reserve Bank releases data on private sector credit – or loans outstanding. And at the same time, the Housing Industry Association issues estimates of new home sales.

Private sector credit surprisingly slowed to just 0.2% growth in June, with both business and personal lending going backwards. Still, the data covered the election campaign period, and other indicators have also pointed to a slowdown of the economy over that time. 

New home sales soared by 8.2% in July after falling by a similar magnitude over the previous two months. It now appears clear that new construction has peaked, although activity could end up running across the top of the mountain for a few months, before easing.

On Thursday, the Home Value Index for August is released by CoreLogic and RP Data. Based on figures released to date, Australian home prices may have lifted 0.5% in the month, led by Sydney (up 1.1%) and Melbourne (up 0.9%) while other capital city home prices have flattened.

It clearly is a big day on Thursday. Not only is the closely-watched home price data released, data on business investment, retail trade and the Performance of Manufacturing gauge are also on the agenda. 

Retail spending softened over June and July as consumers sought to tread cautiously over the election period. Spending may have risen 0.3%. And business investment was also likely affected by the election campaign, as well as the UK vote on European Union membership. Private capital expenditure may have fallen by 5% in the June quarter.

The Performance of Manufacturing Index may confirm that the sector is recording its strongest expansion in a decade.

US jobs data focuses minds 

The key economic data release on international markets is the US non-farm payrolls, or jobs data, to be issued on Friday. Key purchasing manager surveys in the US and China are also in the spotlight.

In the US, the week kicks off on Monday, with the release of data on personal income and spending. Incomes may have lifted 0.4% in July with spending up 0.3%. But the Federal Reserve’s preferred inflation measure (the core personal consumption deflator) will also be in focus. Annual price growth stands at just 1.6%. 

On Tuesday, the CaseShiller home price series is released, with a measure of consumer confidence and the usual weekly estimates of chain store sales. Home prices are up 5.2% over the year, but may lift further on indications that the new home market is tightening.

On Wednesday, the ADP national employment report covering private sector jobs is scheduled. The report is the forerunner to Friday’s jobs report, and analysts are tipping a 165,000 lift in jobs. 

On the same day, the influential Chicago Purchasing Managers Index is released, together with the weekly data on home loans.

On Thursday, the surveys of purchasing managers come into focus. The surveys are released across the globe, with much interest in results for China and the US. In China, the manufacturing purchasing manager’s index stands at 49.9 with services at 53.9.

The US manufacturing sector appears in better shape, currently standing at 52.6. Any reading above 50 indicates expansion of activity.

And on Friday, the US non-farm payrolls data is issued. It is clear that the job market is in good shape, with jobs up 255,000 in July and the jobless rate at 4.9%. Economists are tipping more job creation of 164,000 in August. Stronger-than-expected job gains, together with higher wages, would lift speculation about a December rate hike.

Also on Friday in the US, international trade data is released with factory orders.

Share market, interest rates, currencies and commodities 

The MidCap50 share index has continued to scale new highs and is up 18% in 2016. Leading the way are the three heavyweights in the sector: Aristocrat Leisure is up 55%, Fortescue is up 169%, and Cochlear is up 48% since the start of the year.