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New Zealand - Labour Market (Q3)

The rise in the unemployment rate to 4.2% in Q3 only reverses the decline in Q2 so we doubt the RBNZ will be too worried at this stage.
Ben Udy Australia and New Zealand Economist
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Australia & New Zealand Economics Weekly

Housing downturn to weigh on activity

The housing downturn is now in full swing. While that hasn’t prevented a solid rise in consumption in Q2, we think falling wealth will be a drag on consumer spending next year. What’s more, our forecast that house prices will eventually fall 15% from their April peak would be consistent with dwelling investment falling sharply in the coming years. The upshot is that the housing downturn will bring the Australian economy close to recession next year.

1 July 2022

Australia & New Zealand Data Response

Australia CoreLogic House Prices (Jun.)

The monthly decline in house prices in June was the largest since 2019 but is unlikely to be the sharpest decline in the current downturn. We think house prices will eventually fall by 15% from their April peak, which will weigh heavily on GDP growth next year.

1 July 2022

Australia & New Zealand Data Response

Australia Retail Sales (May 2022)

The strong rise in retail sales in May highlights the strength in the Australian economy and is consistent with our view that the RBA will continue to hike rates aggressively in the months ahead.

29 June 2022

More from Ben Udy

Australia & New Zealand Economics Update

Hawkish RBNZ will hike even earlier

The RBNZ’s hawkish rate outlook has prompted us to bring forward our forecast for the first RBNZ rate hike from November to May next year. But in contrast to the RBNZ, we don’t think the pandemic will cause lasting damage to the labour market so we’ve pencilled in fewer rate hikes than the Bank.

14 June 2021

Australia & New Zealand Economics Weekly

Lockdowns and bond yields ease

The end of the lockdown in Victoria is an upside risk to our forecast that consumption will be unchanged in Australia in Q2. Meanwhile, S&P upgraded Australia’s credit rating outlook but that has little implication for Australian bond yields. We expect yields to rise to 2% by the end of the year as the RBA starts to taper its weekly bond purchases in November.

11 June 2021

Australia & New Zealand Data Response

International Trade & Retail Sales (Apr.)

The trade surplus widened again in April but that was largely driven by higher commodity prices. Export volumes will need to recover further in the months ahead to prevent trade from being a drag on GDP growth yet again in Q2.

3 June 2021
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