Focus on overseas data as Australian economy cools off

Australians will look to the US and China for economic sneezes as the nation tries to avoid catching a fiscal cold.

After promising jobs and inflation figures pointed to cooling inflation, the domestic economy is set for a comparatively quiet week of data with the Australia Day public holiday on Friday set to shorten the business week.

The Australian Bureau of Statistics will release its monthly business turnover data on Tuesday, which economists say will provide another indication of the economy’s strength.

NAB will also publish its December business survey, which has been tipped to show conditions remain above average.

The main data points set to influence the Australian economy will likely come from the US, where economic growth data for the December quarter on Thursday and personal income and spending data on Friday (US time).

Analysts will keep an eye on the latter figures in particular as they include a key measure of inflation, with CommSec economists Ryan Felsman and Craig James predicting the annual core inflation gauge could ease to 2.9 per cent.

They are also tipping the US economy to grow by about 1.5 per cent.

Central banks in Europe, Canada and Japan will hand down interest rate decisions throughout the week.

Economists will also look to China when the nation releases its January loan prime rates on Monday.

China’s stalling growth has for months given rise to talk it must do more to boost its economy, and a cut to loan prime rates could buoy Australian exporters.

This comes after the ABS reported the monthly consumer price index for November slowed to 4.3 per cent, its lowest level since January 2022.

If the overseas data remains promising, borrowers could hold out hope when the Reserve Bank of Australia makes its first interest rate decision of the year on February 6.


Kat Wong
(Australian Associated Press)


Like This