For August
Provided by: Reserve Bank of Australia

Commodity Index m/m: 1.0%, pr. 3.6% (Jul), pr. 7.9% (Jun), pr. 6.1% (May),
9.4% (Apr)

On the year the commodity price index rose to show a 45.2% increase. Metals like iron ore, and fuels like coal and crude oil have seen prices sky rocket in the last year, but that run-up took a major step back in August as commodity prices eased. Strong exports helped to shrink Australia's 2nd quarter current account and boost company's operating profits.

Still, the Aussie was pressured as the RBA Governor Glenn Stevens is primed to reduce rates by a quarter point tomorrow in order to help the rest of the economy, which unlike the export industry, is suffering from high interest rates and high inflation, and a crimp in the housing market. The Aussie has been fallin since the last RBA meeting, when they signalled an interest rate cut was on the way and that continued in today's session.

From the Release: "Preliminary estimates for August indicate that the Index rose by 1.0 per cent (on a monthly average basis) in SDR terms, following an increase of 3.6 per cent (revised) in July.

The largest contributors to the rise in August were increases in the prices of coking coal and thermal coal (reflecting the inclusion of preliminary estimates), and wheat. The prices of gold, aluminium, copper and wool fell. In Australian dollar terms, the Index rose by 7.0 per cent in August following an increase of 3.3 per cent (revised) in July."

Provided by: Reserve Bank of Australia
Official Release: Statement

The Reserve Bank of Australia followed through with their signal from the last meeting, when they said "monetary policy could move to become less restrictive." Today, they lowered rates to 7.00% from 7.25%, the first reduction in the benchmark interest rate in nearly 7 years. Growth in demand, which had been pressuring prices, is now being restrained by" tight financial condition, in conjunction with other factors including higher fuel costs and lower asset values. Terms of trade continues to add to national income and the ability to spend.

From the Release: "Given the opposing forces at work, considerable uncertainty has surrounded the outlook for demand and inflation. On balance, however, it is looking more likely that household demand will remain subdued and overall economic growth slow over the period ahead. Inflation is likely to remain relatively high in the short term, with the CPI affected by the high global oil prices in mid year and other increases in raw materials prices. But looking further ahead, the outlook for demand suggests that inflation in both CPI and underlying terms is likely to decline over time, provided wages growth remains contained. The Bank’s forecast remains that inflation will fall below 3 per cent during 2010.

Weighing up the available domestic and international information, the Board judged that there was now scope for monetary policy to become less restrictive. The Board will continue to assess prospects for demand and inflation over the period ahead, and set monetary policy as needed to bring inflation back to the 2-3 per cent target over time."

For 2nd Quarter s.a.
Provided by: Australian Bureau of Statistics

GDP y/y: 2.7%, forecast 2.9%, pr. 3.6% (1Q '08), 4.3% (4Q '07)

GDP growth slowed to a seasonally adjusted 0.3% in the June quarter, after an upwardly revised 0.7% in the first. Q2 and Q3 has been the weakest quarters for growth every other year. Non-farm GDP increased 0.5%;terms of trade rose 13.1%; real gross domestic income rose 3.3%. The RBA has gotten the slowdown it was looking for, and inflation is starting peak, more so because of easing oil prices. The poor release justifies the banks rate cut and leaves more on the table. From the release:

In seasonally adjusted terms, the main contributors to the increase in expenditure on GDP were Machinery and equipment investment (0.9 percentage points) and Exports (0.5 percentage points). The largest negative contributions came from Imports (-0.6 percentage points), Inventories (-0.5 percentage points), Engineering construction investment (-0.2 percentage points) and Defence investment (-0.2 percentage points).

For August
Provided by: Australian Industry Group
Official Release: PDF

From the Release:

■ "The national construction industry continued to decline in August 2008, although the rate of contraction moderated for a third consecutive month.
■ The seasonally adjusted Australian Industry Group/ Housing Industry Association Performance of Construction Index (Australian PCI®) registered 43.1 in August, to remain below the critical 50.0 points level separating expansion from contraction for a sixth straight month.
■ The decline reflected the impact of weaker house building activity, a further fall in the apartment sector (albeit at a slower rate) and a reduction in work on engineering construction projects. This outweighed an improvement in commercial activity, which expanded for the first time in the past six months.
■ Construction firms overwhelmingly linked the continued reduction in total construction activity to subdued market demand and subsequent declines of new order volumes. There were also reports that economic uncertainty and tight credit conditions had led to further delays in project commencements.
■ On an aggregate industry basis, both activity and new orders posted on-going declines during August, resulting in firms reducing their workforces, although at a less marked rate than in the previous month ."

For July
Provided by: Australian Bureau of Statistics (ABS)

Approvals for home loans declined 0.2% in July, slightly below the forecast of flat growth. In June approvals declined by a much larger 3.7%, though today's negative result is the now the 6th straight month that approvals have dropped. The central bank lowered rates to 7.00% from 7.25%, in a move to make monetary policy less restrictive. It was the first time the RBA has lowered rates in nearly 7 years. With the economy cooling as domestic demand decreases, the bank expects inflation to moderate. 

Governor Glenn Stevens signaled that the RBA was going to lower rates, in its statement following the August 5th meeting. Since then the AUD/USD slid from 0.9150 to 0.8075, a move of 1000 pips. Only a couple of weeks earlier, on July 15th, the AUD/USD hit a 24-year high near 0.9847. The slide from that high is even more dramatic, amounting to almost 1750 pips in about two months time. 

For August
Provided by: National Australian Bank
Official Release: PDF (...Save Link As)

Bus. Conditions: -3, pr. -5 (Jul), 0 (Jun), 7 (May), 7 (Apr), 7 (Mar),
11 (Feb), 13 (Jan)

Business Confidence rose 2 points to -7 in August, as the retail sector rose slightly from its very poor readings recently. This reflected lower oil prices and changed interest rate expectations. The Business Conditions index rose 2 points as well to -3. The slight improvement in conditions was not broadly based. Indeed, all sectors fell further, other than mining, which was sharply up. There were particularly sharp falls in finance, property and business services, wholesaling and transport. NAB's GDP forecast for 2008 was marginally lowered to 2½% - reflecting slightly lower Q2 estimates.

From the Release:

• "Business conditions & confidence (and capacity utilisation) stabilise around recent lows.
• But all sectors, other than mining, still deteriorating (albeit retail confidence also off lows).
• Business sees no improvement in prospect, while forward orders continue to fall.
• Survey implies demand in Q3 2008 around 1¼% (annualised) & non-farm GDP around 2%.
• Wages growth unchanged, but inflation still high on the back of higher purchase costs.
• Global forecasts broadly unchanged (but weaker near term outlook for Europe, UK, Japan).
• Local GDP forecasts lowered to 2½% in 2008 (base effects) but unchanged in 2009 at 2¼%.
• RBA focus remains on redressing overly tight policy. We still see downside risks to growth and NAB expects another 25 point cut before end 2008 and 100 points over the next year."

For August - Seasonally Adjusted
Provided by: Australian Bureau of Statistics

Unemploym. Rate: 4.1%, forecast 4.4%, pr. 4.3% 

The Australian economy added 14.6K jobs in August, on a seasonally adjusted basis. That level almost tripled forecasts. July's figure was revised up modestly, from 10.9K to 18.7K. The added jobs helped bring the unemployment rate down to 4.1%, from July's 4.3%.

The AUD/USD rose about 40 pips from its level prior to the release, but was down overall for the session as New Zealand's bigger than expected rate cut hurt the fortunes of the Asian-Pacific currencies.

For 2nd Quarter
Provided by: Australian Bureau of Statistics
Official Release: Key Figures

From the Release: "The seasonally adjusted estimate for the total number of dwelling units commenced fell 3.7% in the June quarter which follows a revised fall of 1.0% in the March quarter."

For July
Provided by: Westpac-Melbourne Institute
Official Release: Press Release

From the Release: "Westpac's Chief Economist, Bill Evans commented, "This result is weak, with growth in the Index remaining below trend. However the story is not as disturbing as we reported last month. Last month we reported growth in the Index had slumped to 2%. This report contains a substantial upward revision in growth in June to 4%. Growth has slowed further from this higher base moving appreciably below trend in July. The reason for the substantial upward revision is the much stronger than expected growth in corporate profits and productivity as indicated in the June quarter national accounts. Whereas profits and productivity had together been contributing a steady 1–1.5 ppt's to growth in the Index this jumped to 3–3.5 ppt's in April–June following the information update from the national accounts. In the June quarter the national accounts reported a stunning 12% rise in the profits of (non financial) companies. That was understandably driven by a 40% increase in mining profits and a 5% increase in non-mining profits. In contrast profits in the small business (including the farm sector) contracted by 2%."

Provided by: Reserve Bank of Australia
Previous Release: PDF

For August m/m (s.a.)
Provided by: Australian Bureau of Statistics (ABS)

Building Approvals y/y: -8.6%, forecast -4.5%, pr. -3.7% (Jul), -7.8% (Jun),
-0.4% (May), 5.2% (Apr)

Australian building approvals were down 3.7% in August compared to July and registered an 8.6% drop compared to a year ago. Both of those numbers showed bigger falls than was expected by economists. The weaker figures reflect continued investor caution due to high interest rates and low residential yields. That should remain true as long as the financial turmoil remains. Traders are pricing in a 50 point basis cut when the RBA meets next Tuesday.

For August
Provided by: Bank of Australia

y/y: 10.5%, forecast 10.3%, pr. 11.2% (Jul), 11.7% (Jun), 13.4% (May)