Data Vault – A weekly wrap up of key economic releases in Australia and beyond

January 30, 2012

Economic Data Vault

January 30th 2012

Welcome to our weekly Data Vault. The Vault is put together by our team here at Lighthouse and we offer it as a resource to readers and clients who want to quickly get a feel for the data over the week without having to read a full blog or economic report. It will be released each Monday morning and while our primary focus is Australia we also include our key overseas indicators.

Australian Data

Producer Price Index

Inflationary pressures in Australia continued to soften in the fourth quarter with final producer prices rising 0.3% which was a touch weaker than the 0.4% that was expected. The three previous quarters saw outcomes of 1.2% in Q1, 0.8% in Q2 and 0.6% in Q3. The entire gain in producer prices was driven by a 2.3% rise in imports which are now up 0.6% over the year while domestic producer prices were flat over the quarter with their annual pace no sitting at 3.2%. Overall final producer prices are up 2.9% over the past 12 months.

Consumer Price Index

Consumer prices were equally soft over the fourth quarter with the headline consumer price index unchanged from Q3 with the annual rate slowing from 3.5% to 3.1%. The biggest drag on the index was a 1.5% fall in food prices while health prices were down 1.2% over the quarter. Communication saw the biggest jump over the quarter, up 1.1%. On a seasonally adjusted basis prices were up 0.2% QoQ and 3% YoY. The core reading was a little firmer with the trimmed mean up 0.6% while the weighted median was up 0.5% with the annual rates firmly within the RBA’s 2-3% target band at 2.6%

Leading Index

The annual pace of the index of Australian leading indicators compiled by Westpac fell heavily in November after the index dropped by 0.2% over the month. The annual pace of dipped to 1.6% with substantial negative revision seeing the recent high of 4.5% back in August revised down to 3.75%. The annual pace of the index is now well below its long-term average suggest growth through at least the first half of 2012 is expected to be soft. The coincident index was little changed in November with its annual pace still hovering around its long run average.

Offshore Data

EU PMI’s

PMI’s readings across Europe were mixed with the European manufacturing index remaining well below 50 at 48.7 in January however it was an improvement on Decembers 46.9 while the services index snuck back above 50 to 50.5 from 48.8. The net result saw the composite Purchasing Managers Index rise back above 50 for the first time since August last year. Both Germany’s manufacturing and services PMI’s rose back above 50 as did France’s services index while France’s manufacturing index remained well below 50.

Regional Fed Reserve Indices

The Richmond Fed’s regional index was the first to be released and it jumped from 3 in December to 12 in January ahead of expectations of a rise to 6. The Kansas City Fed regional manufacturing index also performed quite well in January, rising from a revised -2, after is was previously reported as -4 to 7 ahead of expectations of a rise to 25. Finally the Chicago Fed’s national activity index returned to positive territory in December after a brief slump in November with the three month moving average suggesting a steady improvement in growth over the months ahead.

US GDP

Growth in the US improved in the fourth quarter with the economy expanding at an annualised pace of 2.8% over the quarter which was up on Q3’s annualised pace of 1.8% but short of the markets expectations of a 3% rise. The annual pace of growth was largely unchanged at 1.6% where is has now been for three straight quarters. Personal consumption accounted for 1.45% of the 2.8% increae while a jump in inventories accounted for 1.94% however the fall in government spending almost detracted 1% over the quarter.

US Housing Data

The US housing data over the past week was mixed with pending home sales falling 3.5% in December ahead of expectations of a 1% fall however the drop follows a 7.3% rise the previous month. New home sales unexpectedly fell over the month, dropping 2.2% against expectations of a 1.9% rise however the previous months 1.6% rise was revised up to a gain to 2.3%. Finally house prices jumped 1% in November according to the Federal Housing Financing Authorities house price index however October’s fall of 0.2% was revised down to -0.7%

UK GDP

The latest growth figures for the UK confirm the weakness in the economy with economic activity falling by 0.2% over the quarter which was worse that the 0.1% fall expected. Despite the quarterly fall the annual rate edged higher from an already anemic 0.5% to a still weak 0.8% after the 0.5% fall from Q4 2010 dropped out of the calculation. The persistent weakness in the UK’s manufacturing sector continued to weigh on economic growth while the countries services sector largely stagnated over the quarter.

Yours in data – The Lighthouse Team.

greg@lighthousesecurities.com.au

www.twitter.com/gregorymckenna

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