For October
Provided by: Australian Industry Group (AIG)
Official Release: PDF (Save Link As...)

From the Release:

■ "Manufacturing activity fell for a fifth successive month in October.
■ The seasonally adjusted Australian Industry Group-PricewaterhouseCoopers Australian PMI® fell solidly, by 6.8 points to 40.4, below the 50 point mark separating expansion from contraction. This represents the lowest recorded level of the series since it was begun in 1992.
■ This month’s result reflects a combination of the uncertainties and loss of confidence associated with the worsening of the global financial crisis, slower world growth, particularly in the developed economies, and weaker domestic consumer demand.
■ These factors were reflected in declines across all components of the Australian PMI® in October. Production fell for the fifth consecutive month and more strongly than in recent months. This reflected the ongoing decline in new orders, which fell for the sixth consecutive month. In line with the easing of production, employment fell for the eighth month in October and at a more rapid pace.
■ On the positive side, input and wages costs growth eased significantly in October, while selling price growth also eased solidly.
■ Inventories and supplier deliveries fell markedly. Exports fell.
■ Manufacturing activity fell in all states." 

For 3rd Quarter
Provided by: Australian Bureau of Statistics

HPI y/y: 2.8%, forecast 4.0%, pr. 8.6% (rev. up from 8.2% - 2Q),
13.8% (1Q), 13.8% (4Q '07)

House prices in Australia fell 1.8% in the 3rd quarter compared to the 2nd quarter, and slowed to an annual rate growth of 2.8%. Both figures undershot forecasts, and shows that the housing market is facing several opposing conditions. Though house prices are falling, which should make them more affordable, the lower prices are discouraging new building starts which is exacerbating a shortage in supply. Data last week showed new home sales in September had fallen to a decade low. However, the statistics may be slightly misleading as the composition has changed recently and reflects more non-bank lenders, with lower-value homes, coming into the data. Still, its evident that the Aussie economy is struggling now. The RBA already took aggressive steps in October by cutting rates by a full 1%, and it is expected to cut rates another .50% this week.

Provided by: Reserve Bank of Australia
Current Release: Statement

The RBA slashed rates by 75 basis points, more than the expected 50-bp-cut. The global recession hurts commodity demand, a factor that will be a huge drag of the Aussie economy which exports many raw materials. Since the inflation outlook is easing, the bank has taken the opportunity to cut rates now 200 basis points in the last 3 meetings. As the global recession deepens we can expect this rate cutting campaign to continue. 

From the Release: International economic data have continued to point to significant weakness in the major industrial economies, and there have been further signs that China and other parts of the developing world are slowing as well. These conditions have contributed to further falls in world commodity prices.

In Australia, the overall path of economic activity appears until recently to have been close to what the Board had expected, with a needed moderation in demand occurring after a period of earlier strength. Recent reductions in borrowing rates, the depreciation of the exchange rate and the fiscal stimulus announced in October will work to assist growth in the period ahead, but deteriorating international conditions and falling commodity prices will have a dampening influence. On balance, it appears likely that spending and activity will be weaker than earlier expected.

Consumer price inflation in Australia remained high in the September quarter. As expected, CPI inflation in year‑ended terms picked up to 5 per cent, while underlying measures were just over 4½ per cent. Nonetheless, capacity pressures are now easing and, given the outlook for more moderate growth in demand and activity, it is reasonable to expect that inflation in Australia will soon start to fall. Global disinflationary forces will assist in this regard, though the depreciation of the exchange rate means that the decline of inflation to the target could take longer than would otherwise be the case.

For September m/m (s.a.)
Provided by: Australian Bureau of Statistics (ABS)
Latest release: Building Approvals (HTML)

Building Approvals -21.6%, y/y: forecast -14.3%, pr. -8.6% (Aug), -3.7% (Jul),
-7.8% (Jun), -0.4% (May), 5.2% (Apr)

Australia's housing market is also feeling the lack-of-credit pinch. Building approvals have been on a downtrend since peaking in December of 2007. In September, the number of total dwellings approved plumetted by 7.2% on a seasonally adjusted basis, bringing the year to year change down by 21.6%. This third straight month of decline brings the data to the lowest since April 2001. Home starts are coming to cyclical lows despite an undersupply of housing because the credit pipeline is restricted, and the outlook dim on the economy. The RBA is very likely to further its rate cutting campaign as the recent fundamentals provide evidence of a recession both in the country and globally.

For October - Seasonally Adjusted
Provided by: Australian Bureau of Statistics
Current Release: HTML

Unemp. Rate (s.a.): 4.3%, forecast 4.4%, pr. 4.3% (Sep),
4.1% (Aug), 4.3% (Jul)

The Australian economy added 34.3K jobs in October, which kept the unemployment rate unchanged at 4.3%. Both figures beat economists forecasts, but with the global economy roiling from the credit crisis and commodity prices falling, the labor market is sure to loosen in the months to come. The government said that the unemployment rate would rise to 5% by June 2009 and 5.75% by June 2010.The number of new part time jobs grew while the number of full-time employment slipped by 9,200. For those looking for some optimism, the data was a welcome sign. 

For Oct.

Provided by: Australian Industry Group

Construction eased for the 8th straight month in Australia although at a slower pace than in September. A construction PMI measured by the Australian Industry Group and Housing Industry Association read 36.4 for October, edging up from the previous month's 31.8. Tight credit conditions are chocking off funding, while weak economic sentiment pulls down demand. Commercial building activity improved slightly, while housing dropped significantly.

Provided by: Reserve Bank of Australia
Official Release: Statement

From the Release: "In summary, world financial market developments and economic prospects have moved rapidly in the period since the last Statement. At its recent meetings, the Board noted that domestic economic conditions had been evolving broadly as expected in the period immediately prior to the latest bout of financial turmoil. With the needed moderation in demand occurring, the Board judged at its September meeting that inflation was likely to decline gradually over time, and that this allowed scope to begin moving the cash rate towards a less restrictive setting.

The renewed financial turmoil which began in the second week of September materially altered the balance of risks and raised the prospect that global economic conditions could be significantly weaker than previously assumed. That, in turn, would mean weaker prospects for demand and output in Australia, and greater downward pressure on inflation over time. In view of this shift in the balance of risks, the Board judged at its October and November meetings that a significantly more rapid adjustment of the monetary policy setting was needed, and hence the Board decided to make unusually large reductions in the cash rate at those two meetings. In reviewing the stance of policy each month in the period ahead, the Board will be seeking to strike the appropriate balance between avoiding an unduly sharp weakening in demand and the need for inflation to fall back to the target over a reasonable period."

For November
Provided by: Westpac Melbourne Institute
Current Release: PDF

From the Release: "The Westpac-Melbourne Institute Index of Consumer Sentiment rose by 4.3% in November from 82.0 in October to 85.5 in November.

This is a welcome result. There has been great uncertainty as to how consumers would react to the barrage of news over the last month. The survey in October preceded the Reserve Bank's surprise decision to reduce its cash rate by a surprisingly large 1%. Of course that good news was followed by the announcement by the Commonwealth government of its $10.4bn stimulus package including cash payments of $8.7bn and a doubling of the first home owners grant for established homes and a tripling of the grant for new construction. This good news was followed last week by the Reserve Bank's second surprise reduction in its cash rate of a bold 0.75%. Furthermore the banks effectively matched the RBA's 1% cut in the cash rate with an effective 0.98% cut in the prime variable mortgage rate in two tranches. The banks have responded to the second 0.75% cut by the Reserve Bank with cuts ranging between 0.58% and 0.65%. Essentially since the last survey the prime variable mortgage rate has been reduced by 1.56% - 1.63%.

On the other hand households have been unsettled by the ongoing disturbances in financial markets associated with the global credit crisis. All institutions regulated by APRA were given government guarantees which affected confidence in those institutions that did not receive the guarantees and restrictions were placed on the access of investors to their savings. Extensive media coverage of these events would have unnerved households. The value of savings in direct shares and superannuation was battered with the share price index falling by around 14%. News of house price declines and the prospect of a global recession would also have weighed heavily on sentiment. The Australian dollar fell as low as US 59 cents at one stage during the month. Despite this weakness in the Australian dollar the precipitous decline in the US dollar price of oil allowed a 12.5% fall in petrol prices."

November Survey
Provided by the: Melbourne Institute (sub. req'd)

As the global slowdown deepens, Australian consumers are expecting inflation to ease in the coming year. The RBA is expecting the CPI to retreat back into the 2%-3% target range, but not until 2011. Besides the oulook on inflation, the survey also showed consumers to be more pessimistic about the domestic and global economy, as the unemployment expectations index surged another 13.2%, after the 11.6% rise in October.

Meeting Minutes from November 4th
Provided by: Reserve Bank of Australia
Official Release: Minutes

From the Release: "Key factors in members’ consideration of the policy decision were the continuing poor conditions in financial markets, the significant deterioration in the outlook for the world economy, with implications for Australia, and the likelihood that inflation in Australia would fall over the year ahead...

In Australia, until recently, the overall path of economic activity had been roughly in line with the Board’s earlier expectations. However, the marked deterioration in global financial conditions over the past couple of months, which had also had an effect on Australian financial markets and share prices, was likely to have a significant effect as well on business and consumer sentiment, and liaison information was reflecting this. This would probably lead to a significant curtailment of planned investment spending and caution on the part of households...

Members noted that consumer price inflation in Australia was again high in the September quarter, as had been expected. However, with domestic capacity pressures now easing and the outlook for much softer growth in demand and activity than had been seen until recently, members could reasonably expect that inflation in Australia would soon start to fall. Global disinflationary forces from the slowdown in the world economy and lower commodity prices would assist in this regard...

Members agreed that a further sizeable reduction in official interest rates was appropriate. This would enable a further meaningful reduction in rates paid by borrowers and could assist confidence among consumers and businesses. In addition, given the changing balance of risks, there was an advantage in moving the setting of monetary policy quickly to a neutral position...

On balance, members judged that a reduction in the cash rate of 75 basis points was appropriate on this occasion. Members were conscious of the high rate of inflation at present and of the need to bring it down over time, but felt that in the current environment a reduction of this size would not undermine that task. As such, they judged that the policy action would strike the right balance between the need to return inflation to the target and the need to reduce the risk of an unduly sharp weakening of demand."

For October (s.a)
Provided by the: Australian Bureau of Statistics
Current Release: Indicator Page

Sales y/y: pr. -8.2%